Lindsay Lewis, Executive Director of the Progressive Policy Institute (PPI) released the following statement of support for the nomination of Ketanji Brown Jackson to the Supreme Court of the United States:
“The Progressive Policy Institute applauds the Biden Administration for the historic nomination of Judge Ketanji Brown Jackson to the highest court in the land. Judge Jackson is an unequivocally qualified and highly respected judge, who has already been confirmed three times by the Senate with strong bipartisan support. We encourage Senate Republicans to put aside their typical tribalism, avoid politicizing this process, and confirm Judge Jackson in a timely manner.”
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.
American psychologist Abraham Maslow famously said, “If the only tool you have is a hammer, you tend to see every problem as a nail.” For state attorneys general, lawsuits are their hammers, and they are constantly searching for additional, bigger hammers.
Right now, state attorneys general, led by New York’s Letitia James, are urging Congress to give them a shiny, Thor-sized hammer for antitrust litigation. The State Antitrust Enforcement Venue Act of 2021, which is currently under consideration in Congress, would categorically eliminate State antitrust actions from the federal Multi-District Litigation (MDL) system.
For decades, MDLs have centralized pretrial proceedings when large numbers of similar cases, including state antitrust claims, are filed against the same business involving the same set of allegations. Although not perfect, this system provides the parties and courts with a useful tool for resolving disputes.
Some Democrats want to seek political revenge for the Republicans’ unapologetic use of their power over the past decade to engineer a conservative judiciary. Since October, they have been calling on President Biden to expand and pack the Supreme Court and federal judiciary with liberal judges. Biden has wisely resisted these calls and is setting up a commission to provide thoughtful ways to repair the partisan damage done to the courts over the past decade.
When it comes to reforming the courts, Democrats need to tread carefully. Our criminal and civil justice systems are keystones of our economic and political liberty; they keep order and facilitate the peaceful resolution of disputes. Neither system is perfect, but these objectives are unachievable if there is a belief among enough Americans that cases are decided by partisan politics, not justice.
The good news is that Biden has entrusted this effort to two highly respected lawyers, former White House Counsel Bob Bauer and former Deputy Assistant Attorney General Cristina Rodriguez. The persistent guidepost for their work must but ensuring the impartiality of the courts. Their big challenge, therefore, is putting this political genie back in the bottle.
At every turn, the Trump administration and Republicans in Congress have bungled the coronavirus pandemic and shortchanged our recovery. For the first month after most programs created by the CARES Act – the last major stimulus bill passed by Congress back in March – expired, the GOP wasted valuable time on half-measures that could not pass and executive orders that do not help. Washington Republicans have now completely abandoned work on further relief measures so they can focus on a partisan gambit to pack the Supreme Court with yet another right-wing justice before voters have a chance to make their voices heard in just five weeks.
It didn’t have to be this way. Back in May, House Democrats passed the $3 trillion HEROES Act that they intended to be a follow-up to the CARES Act. Although the bill had many flaws, it offered a starting point for negotiations. Their Republican counterparts in the Senate, on the other hand, spent two months doing literally nothing to advance any additional relief legislation. It was only a full month after the major provisions in the CARES Act had expired that the Republican-controlled Senate voted on a partisan $500 billion “skinny” stimulus bill, which then failed to pass the chamber. Negotiations have now stalled due to GOP’s insistence on penny-pinching for a critical stimulus bill that, it should be noted, would almost certainly be less expensive than the wasteful $2 trillion tax cut the party enacted at the height of our most recent economic expansion.
In an attempt to cover for his party’s fecklessness, President Trump issued a series of executive orders ostensibly designed to fill the needs for further relief unmet by Congress. But as is too often the case with Trump, these actions were almost entirely superficial – and in some cases, actively harmful to the people supposedly helped. Rather than playing these pointless partisan games, Republicans need to join Democrats at the negotiating table and deliver a real solution for the millions of Americans struggling to survive amidst a global pandemic and the worst economic crisis since the Great Depression.
Anyone at Risk of Contracting Coronavirus
The first priority for policymakers must be controlling the pandemic, as our economy cannot fully recover until people feel safe going in public to work or spend money. Adequate testing and tracing are essential to preventing the virus from spreading until a vaccine is found, but delays in test results have already undermined our COVID response. Democrats proposed $75 billion for coronavirus testing and contact tracing as part of their stimulus proposal in the HEROES Act, while Republicans proposed a much-smaller $25 billion investment, including just $16 billion of new funding not reallocated from CARES Act programs. But without a deal, neither side gets any investment – and the virus continues to spread through our communities.
People Who Have Lost Their Jobs
Up to 26 million Americans remain unemployed thanks to the pandemic. In normal times, unemployment benefits typically only cover 34-54 percent of lost wages for a limited period of time. These benefits, however, are woefully insufficient during a prolonged period when few job openings are available to be filled. The CARES Act sought to address this problem by increasing UI benefits by $600/week through the end of July and extending the maximum number of weeks someone could claim unemployment benefits until December.
Democrats proposed to continue the full $600/week until January (or tie the extension of benefits to real economic indicators), while Republicans wanted to replace it with a $300/week supplement through the election). There was a very reasonable middle-ground here, as both sides agreed that supplemental unemployment benefits should not be allowed to expire in their entirety – but because no agreement was reached, that is exactly what happened.
Trump claimed to resolve the problem with an executive order letting states use Federal Emergency Management Agency (FEMA) money to establish a supplement for unemployment insurance. But this approach was riddled with problems: it depended on state unemployment offices, which are already burdened with crushing caseloads and obsolete information technology, to set up new administrative structures, delaying the receipt of benefits. The new supplement was worth only half as much as the one authorized by the CARES Act, and was not made available to low-income workers who receive less than $100/week in normal unemployment benefits. Finally, the FEMA fund only had enough money to fund benefits for six weeks – and required drawing upon funds that will likely be needed to fight wildfires out west and repair damage from hurricanes in the south.
Landlords and Lenders
Failure to adequately support unemployed Americans will have cascading effects throughout the economy. Because the unemployed then cannot spend as much money as usual, the businesses that rely on their patronage also lose income, which hurts workers throughout the broader economy and deepens the recession. They are also more likely to fall behind on payments for rents, utilities, or mortgages. The CARES Act included a temporary moratorium on evictions, but now that it is expired, millions of American families are at risk of losing their homes by the end of the year. Democrats have proposed imposing an even broader moratorium than was included in the CARES Act. The Trump administration, meanwhile, ordered the Centers for Disease Control to enact a limited moratorium on evictions until the end of the year for low- and middle-class renters.
Although a moratorium may give at-risk renters some temporary relief, it fails to resolve the underlying issue: lost income. Trump’s moratorium simply delays the inevitable for any renter who is behind on rent and would otherwise face eviction. Meanwhile, smaller landlords will lose out on income they need to pay for mortgages and property taxes, which puts them at risk of default. Lenders may also face significant losses from landlords and homeowners unable to make their required payments. If Congress were to instead provide adequate income support for people who have lost their incomes in the pandemic, they would ensure people can afford to remain in their homes without creating these new burdens.
Small Businesses and Their Workers
The CARES Act included a Payroll Protection Program (PPP), which gave small- and medium sized-businesses money to retain their workforce. That funding dried up when the program ended on August 8th. Here, Congressional Republicans actually want to be more generous, proposing almost $360 billion in small business support, loans, and employee retention provisions, while Democrats proposed $290 billion. But without a deal, small businesses – many of which are operating in industries, such as dining and hospitality, that have been particularly hurt by the pandemic – have not gotten any more support.
The only support for small businesses in President Trump’s executive orders was a counterproductive payroll tax holiday. Neither party in Congress supported Trump’s previous proposals to temporarily cut the payroll tax, so instead he used his limited authority to defer collection of some payroll taxes until next year. But since workers will still owe that money in 2021, many employers are just withholding the tax anyway. Meanwhile, federal workers – including those in the military – who cannot opt out of deferral are being advised not to spend the money so they aren’t financially flattened by the massive tax bill for back taxes they will receive next year.
State and Local Governments
The coronavirus pandemic has blown a massive hole in the budgets of state and local governments: income and sales taxes are drying up while spending on safety-net programs, such unemployment insurance and Medicaid, have increased dramatically. Because most state and local governments are required to balance their budget, this fiscal squeeze will compel them to cut their budgets right when people and businesses need government support the most.
Although Congress included some aid for state and local governments as part of the CARES Act, it only allowed this money to be spent on new coronavirus-related expenses, not to replace lost revenues. Republicans have proposed to loosen rules on how states could spend this aid, but offered no additional funding. Democrats, meanwhile, included almost $1 trillion in new funding for state and local governments in the HEROES Act.
Many on the right have argued that providing further aid would be a “bailout” for the finances of poorly-managed states, but this criticism is at best deeply misguided. PPI projects that state and local governments will need at least $250 billion in additional support beyond what was already appropriated before the end of 2021 just absorb the pandemic’s financial impacts without making deep cuts to essential services – and this figure could be even higher if the economic impact of this unpredictable crisis is worse than current projections. Rather than argue over an arbitrary dollar amount, Congress can easily address the concerns of both Democrats and Republicans by designing programs that provide aid to state and local governments based on the real pandemic-induced shortfalls realized on their balance sheets.
Parents and Families
The pandemic has taken a particularly brutal toll on parents who are unable to send their children back to school this fall. It is difficult for workers to do their jobs, either remotely or in-person, when they are unable to access child care that they usually could depend on at this time of year. It also poses a special burden on students from low-income families who lack the internet access necessary to participate in online classes.
The good news here is that both parties have proposed about $100 billion in additional support for schools. But they disagree on what it should be used for: the Trump administration would use this money to pressure school districts across the country to return to in-person classes, the even though doing so would be unsafe without the proper public health safeguards in place. The Democrats’ proposal, on the other hand, would also enable schools to stand up high-quality remote learning to keep their students learning while school buildings remain closed.
Unfortunately, these nuances don’t even matter at the moment: because Congress failed to reach a broader agreement, schools have received no additional federal support. Even worse, the looming shortfalls facing state and local budgets are likely to result in deep cuts to education spending (as they did following the 2008 financial crisis), further jeopardizing the long-term opportunities for children and families.
Voters
State and local governments face an unprecedented challenge administering a national election in the midst of a pandemic, made even worse by foreign governments threatening to interfere again like they did in 2016. The HEROES Act included $3.6 billion to support election integrity and vote-by-mail operations to make sure every vote is counted, while the Senate bill included nothing. As we enter the final stretch of what is perhaps the most contentious presidential election in modern history against the backdrop of several overlapping national crises, the failure of federal policymakers to support election infrastructure jeopardizes the bedrock of our democracy.
Conclusion
Although neither party’s proposals have been perfect, only one is making any serious effort to find common ground and support our economy in a time of unprecedented crisis. While House Democrats prepare to vote this week on a new package of proposals that is more moderate than the HEROES Act they passed four months ago, President Trump and Senate Republicans are leaving millions of Americans in the lurch by prioritizing partisan court packing over any further fiscal relief. Democratic candidates for office and all stakeholders, from the worker who is at risk of losing her home along with her unemployment benefits to the parent who cannot save his small business and give his child a decent education at the same time, should pressure Republicans to return to the negotiating table and work in the public interest – or face severe consequences in November.
To avoid the expense and stress of going to court, Americans are turning to arbitration to settle workplace, and other, disputes. Free enterprise depends on businesses, employees, and consumers to be able to resolve disputes quickly and fairly. Plaintiffs’ lawyers, who file lawsuits for a living, are trying to convince Congress to take that option away.
The House recently held a hearing to ban pre-dispute arbitration agreements in employment, consumer, and anti-trust matters. Their supporters are attaching anti-arbitration clauses to various bills, including the National Defense Authorization Act this month, and want action on a comprehensive ban (the “FAIR Act”) before recess. They also are trying to leverage the #MeToo movement, which is critical to the success of women in the workplace, to suggest that courts are the only places for protecting people’s rights.
WASHINGTON—Will Marshall, President of the Progressive Policy Institute, today released the followed statement after President Trump declared a national emergency to fund the border wall:
“By declaring a national emergency to build a border wall, President Trump has crossed the Rubicon. He has turned a cheap partisan stunt into a bona fide Constitutional crisis.
“Congress this week declined to give Trump all the money he demanded to wall off Mexico from the United States. The president has declared an emergency explicitly to defy the will of Congress and usurp its Constitutional power to raise and spend public money. In his contempt for democratic norms, Trump makes no effort to conceal the fact that the alleged ’emergency’ on the border is a political contrivance to assert his will. Having failed to extort wall funding from Congress through the longest government shutdown in U.S. history, he is willing to violate the Constitution to get a political ‘win.’
“This is a clear and cynical abuse of presidential power. Trump seems not to understand or care that U.S. presidents aren’t medieval monarchs, who can demand money from parliaments. Now he’s willing to politicize and trivialize presidential authority to declare national emergencies to fulfill a demagogic campaign promise. The White House will now seek to shift funds Congress has appropriated for national defense and other legitimate purposes to finance a stupid ‘solution’ to a non-existent problem.
“All friends of American democracy, regardless of outlook or party, must rally to the defense of the U.S. Constitution’s separation of powers. Shamefully, Senate Republicans have yet to stand up for the Constitution they’ve sworn to defend. Their supine unwillingness to put patriotism above partisanship means that Americans must trust to the courts to stop a rogue president.
“Trump’s power grab will no doubt give fresh impetus to efforts to impeach him. That’s understandable, but for now the wiser course for progressives is to keep the pressure on the Senate to defend its Constitutional powers and institutional prerogatives, and to use all legal means to prevent Trump from spending public money without Congressional authority. We need to keep the public focused clearly on how deeply Trump is damaging not just our political system, but now also the Constitutional framework that has enabled American democracy to endure through genuine national emergencies.”
Congratulations on your election to the U.S. House of Representatives! In addition to winning your own race, you are part of something larger – the first wave of a progressive resurgence in U.S. politics.
The midterm elections gave U.S. voters their first opportunity to react to the way Donald Trump has conducted himself in America’s highest office. Their verdict was an emphatic thumbs down. That’s an encouraging sign that our democracy’s antibodies are working to suppress the populist virus of demagoguery and extremism.
Now that Democrats have reclaimed the people’s House, what should they do with it? Some are tempted to use it mainly as a platform for resisting Trump and airing “unapologetically progressive” ideas that have no chance of advancing before the 2020 elections. We here at the Progressive Policy Institute think that would be huge missed opportunity.
If the voters increasingly are disgusted with their dissembling and divisive president, they seem even more fed up with Washington’s tribalism and broken politics. For pragmatic progressives, the urgent matter at hand is not to impeach Trump or to embroil the House in multiple and endless investigations. It’s to show Democrats are determined to put the federal government back in the business of helping Americans solve their problems.
We think the House Democratic Class of 2018 should adopt this simple mantra: “Get things done.” Tackle the backlog of big national problems that Washington has ignored: exploding deficits and debt; run-down, second-rate infrastructure; soaring health and retirement costs; climate change and more. And yes, getting things done should include slamming the brakes on Trump’s reckless trade wars, blocking GOP efforts to strip Americans of health care, as well as repealing tax cuts for the wealthiest Americans.
PPI, a leading center for policy analysis and innovation, stands ready to help. We’re developing an extensive “Do Something” Agenda. Today, we are releasing the first in a series of concrete, actionable ideas designed expressly for Democrats who come to Washington to solve problems, not just to raise money and smite political enemies.
As you get settled into your new office, we’ll look for opportunities to acquaint you and your staff with these pragmatic, common-sense initiatives, and to discuss other ways we might be of service to you. That’s what we’re here for.
Regards,
Will Marshall President Progressive Policy Institute
First and foremost, it’s time for Congress to start doing its job on trade. A key step is enacting the Trade Authority Protection (TAP) Act. This balanced legislation would rein in Trump’s abuse of delegated trade powers, require greater presidential accountability, and enable Congress to nullify irresponsible tariffs and trade restrictions.
For the last two decades, different versions of net neutrality have bounced between Congress, the Federal Communications Commission, the courts – and most recently the states – but the issue remains unresolved.
It is time for Congress to solve this problem for good by enacting a strong, pro-consumer net neutrality law – an outcome that is politically possible even in this era of maximalist gridlock and deeply divided government, given the broad consensus that has formed around the vital issue of ensuring an open internet.
The number of large U.S. manufacturing facilities has dropped by more than a third since 2000, devastating many communities where factories were the lifeblood of the local economy.
One promising way to revive America’s manufacturing might is not by going big but by going small – and going local. Digitally-assisted manufacturing technologies, such as 3D printing, have the potential to launch a new generation of manufacturing startups producing customized, locally-designed goods in a way overseas mega-factories can’t match. To jumpstart this revolution, we need to provide local manufacturing entrepreneurs with access to the latest technologies to test out their ideas. The Grassroots Manufacturing Act would create federally-supported centers offering budding entrepreneurs and small and medium-sized firms access to the latest 3D printing and robotics equipment.
As many as 4.4 million U.S. jobs are going unfilled due to shortages of workers with the right skills. Many of these opportunities are in so-called “middle-skill” occupations, such as IT or advanced manufacturing, where workers need some sort of post-secondary credential but not a four-year degree.
Expanding access to high-quality career education and training is one way to help close this “skills gap.” Under current law, however, many students pursuing short-term career programs are ineligible for federal financial aid that could help them afford their education. Pell grants, for instance, are geared primarily toward traditional college, which means older and displaced workers – for whom college is neither practicable nor desirable – lose out. Broadening the scope of the Pell grant program to shorter-term, high-quality career education would help more Americans afford the chance to upgrade their skills and grow the number of highly trained workers U.S. businesses need.
America’s massive health care industry faces three major challenges: how to cover everyone, reduce costs, and increase productivity. Telehealth – the use of technology to help treat patients remotely – may help address all three. Telehealth reduces the need for expensive real estate and enables providers to better leverage their current medical personnel to provide improved care to more people.
Despite its enormous potential, however, telehealth has hit legal snags over basic questions: who can practice it, what services can be delivered, and how it should be reimbursed. As is the case with any innovation, policymakers are looking to find the right balance between encouraging new technologies and protecting consumers – or, in this case, the health of patients.
Telehealth policy has come a long way in recent years, with major advances in the kinds of services that are delivered. Yet a simple change in Medicare policy could take the next step to increase access and encourage adoption of telehealth services. Currently, there are strict rules around where the patient and provider must be located at the time of service – these are known as “originating site” requirements – and patients are not allowed to be treated in their homes except in very special circumstances. To expand access to Telehealth, Congress could add the patient’s home as an originating site and allow Medicare beneficiaries in both urban and rural settings to access telehealth services in their homes.
As many as 41 million Americans live in “higher education deserts” – at least half an hour’s drive from the nearest college or university and with limited access to community college. Many of these deserts are in rural America, which is one reason so much of rural America is less prosperous than it deserves to be.
The lack of higher education access means fewer opportunities for going back to school or improving skills. A less educated workforce in turn means communities have a tougher time attracting businesses and creating new jobs. Congress should work to eradicate higher education deserts. In particular, it can encourage new models of higher education – such as “higher education centers” and virtual colleges – that can fill this gap and bring more opportunity to workers and their communities. Rural higher education innovation grants are one potential way to help states pilot new approaches.
Regulation plays a critical role in refereeing competition in a free market economy. But there’s a problem: Each year, Congress piles new rules upon old, creating a thick sludge of regulations – some obsolete, repetitive, and even contradictory – that weighs down citizens and businesses. In 2017, the Code of Federal Regulations swelled to a record 186,374 pages, up 19 percent from just a decade before. PPI proposes a Regulatory Improvement Commission (RIC), modeled on the highly successful Defense Base Realignment and Closure (BRAC) process for closing obsolete military installations. Like the BRAC process, the proposed RIC would examine old rules and present Congress with a package of recommendations for an up-or-down vote to eliminate or modify outdated rules.
Jumpstarting U.S. production and purchase of Electric Vehicles (EVs) would produce an unprecedented set of benefits, including cleaner air and a reduction in greenhouse gas emissions; a resurgence of the U.S. auto industry and American manufacturing; the creation of millions of new, good, middle class manufacturing jobs; lower consumer costs for owning and operating vehicles; and the elimination of U.S. dependence on foreign oil. U.S. automakers are already moving toward EVs, but the pace of this transition is lagging behind our foreign competitors. A dramatic expansion of tax credits for EV purchases could go a long way toward boosting the U.S. EV industry as part of a broader agenda to promote the evolution of the transportation industry away from carbon-intensive fuels.
More American workers would benefit directly from economic growth if they had an ownership in the companies where they work. To help achieve this goal, Congress should encourage more companies to adopt employee stock ownership plans (ESOPs), which provide opportunities for workers to participate in a company’s profits and share in its growth. Firms with ESOPs enjoy higher productivity growth and stronger resilience during downturns, and employees enjoy a direct stake in that growth. ESOP firms also generate higher levels of retirement savings for workers, thereby addressing another crucial priority for American workers.
Americans are fed up seeing corporate profits soaring even as their paychecks inch upward by comparison. Companies need stronger incentives to share their prosperity with workers – something the 2017 GOP tax package should have included.
Though President Donald Trump promised higher wages as one result of his corporate tax cuts, the biggest winners were executives and shareholders, not workers. Nevertheless, a growing number of firms are doing right by their workers, taking the high road as “triple-bottom line” concerns committed to worker welfare, environmental stewardship and responsible corporate governance. Many of these are so-called “benefit corporations,” legally chartered to pursue goals beyond maximizing profits and often “certified” as living up to their multiple missions. Congress should encourage more companies to follow this example. One way is to offer tax breaks only for high-road companies with a proven track record of good corporate citizenship, including better wages and benefits for their workers.
Fixating on the traditional aggregate measures of the economy’s health — GDP growth, the unemployment rate, or the inflation trade — ignores not only rising income and wealth inequality, but the fact the American Dream machine has been sputtering for at least two or three decades. Stanford’s Raj Chetty and his co-authorshave shownthat only half of Americans born in 1980 or later were out-earning their parents at the age of 30, compared to 90 percent of those born forty years before. No wonder so many Americans across the political spectrum have been so anxious or even angry, with racial resentment and political incivility on the rise.
Three broad narratives for fixing our American Dream machine, which admittedly won’t cure all problems, have been advanced by political leaders and researchers. The two that have received the most media attention are both either misleading or inadequate.
One narrative, pushed by President Trump and in more muted tones by some Democrats, blames increased and “unfair” trade for the decline of manufacturing jobs and stagnant or slow real-wage growth. Trump and many Republicans also wrongly blame illegal immigrants, who are working (if they can) at low wages doing jobs like cleaning dishes or mowing lawns that few American citizens want to do.
The U.S. Supreme Court is planning to decide this month whether it will hear a case that has started a seismic shift in how local governments look to fund their efforts to address pollution and other public health risks. This case, which deals with removing lead paint from homes, may not dominate national headlines the way nominations do, but it has been the source of intense debate in the legal and business communities for nearly two decades. In short, can local governments make businesses pay for the clean-up of downstream hazards associated with their products even when the companies did not cause the harms?
This case, submitted to the Supreme Court by Sherwin Williams and ConAgra, as well as others like it, are challenging for progressives. On one hand, the allure for environmentalists and social activists of dealing with a hazard without relying on government appropriations is understandable. But, subjecting someone to liability without fault or causation – which do not exist in these cases – violates the core progressive legal philosophy of standing up for one’s constitutional rights. To be clear, companies in these cases lawfully made and sold non-defective products. The lawsuits are solely over downstream hazards that often occurred years after the products were sold.
WASHINGTON—As the Federal Trade Commission (FTC) kicks off public hearings today on economic concentration and competition, the Progressive Policy Institute (PPI) weighs in with a new e-book by economist and antitrust lawyer, Robert Litan, one of America’s leading authorities on antitrust law and competition policy.
In A Scalpel, Not an Axe: Updating Antitrust and Data Laws to Spur Competition and Innovation, Litan takes a deep dive into the growing debate here and abroad about the market power of big U.S. companies, especially in the tech sector. The emergence of “tech-lash,” he says, highlights some valid public concerns, but none rise to the level of justifying the drastic solutions peddled by “antitrust populists:” breaking up the big tech firms or regulating them as public utilities.
Instead, Litan offers a measured policy response to economic concentration. “While there is a temptation to turn to radical solutions to fix our problems – with growing income inequality and our newfound worries about a loss of privacy – major departures from existing policies, especially toward some of the most successful private sector firms and the major economic and social benefits they have generated, also risk unintended costly consequences with uncertain benefits,” he writes.
“Bob Litan’s timely new ebook establishes a new benchmark for rigorous and systematic thinking about the impact of America’s dominant tech platforms on competition and inequality,” said PPI President Will Marshall. ” It illuminates the real problems progressives should tackle and offers pragmatic remedies that won’t jeopardize America’s crucial lead in high-tech innovation.”
Among his key findings, Litan concludes that while tech platforms on balance have not harmed economy-wide innovation, there is evidence that the strength of competition throughout the economy has lessened somewhat. There is also evidence that the rise of the tech platforms and concentrated employer markets across multiple sectors at the local level are contributing to wage inequality.
Anti-trust policy, however, isn’t the right lever for dealing with these concerns, Litan maintains. Other targeted policies, outside antitrust, would improve the state of competition in America, including lifting unnecessary occupational licensing requirements, an end to “no poaching” agreements, and a return to freer trade, which disciplines pricing by U.S. companies.
“There is yet no sound legal or policy basis for to break technology platform firms up for antitrust or other reasons. The law justifiably requires severe and/or sustained anticompetitive conduct as a precondition for court-ordered breakups,” he writes.
Noting the trend toward mergers between firms with dominant positions in different markets, the book proposes tightening the statutory test for mergers and establishing a rebuttable presumption against mergers where the acquiring firm has a dominant position in its market and has the ability to effectively enter any market in which the acquired firm competes.
Nonetheless, the growth of these firms has generated significant non-antitrust concerns about data security and privacy. Litan recommends updating data laws to protect privacy and security by requiring all firms, not just those in tech, to provide plain English explanations of what data the firms collect about consumers and how it is used, the ability to opt out of having their information shared with third parties, and the full disclosure of funding for political ads. He argues that federal law should also require all large data warehouses – a term that would require further definition in an authorized rulemaking – to adopt reasonable measures to ensure data security.
A Scalpel, Not an Axe also warns that the strongest regulations tech’s critics demand may also pose a threat to competition. “In all that they do to regulate the tech industry more intensely, policymakers must be aware that additional data-related regulation is likely to favor large incumbent tech firms relative to smaller competitors and new entrants. Regulatory compliance is a fixed cost, and larger firms can take advantage of their economies of scale to comply,” Litan writes.
Americans justifiably have long taken great pride in the unmatched ability of the U.S. economy to enable entrepreneurs to launch and grow highly innovative companies that drive growth and advance living standards. Bold entrepreneurs and the companies they founded brought us modern communications, airplanes, automobiles, computer software and hardware, and electricity and other forms of energy to power them all.
These innovations and others have constantly reshaped and remade our economy – displacing less efficient technologies and ways of doing business in a process of “creative destruction” that economist Joseph Schumpeter, many decades ago, singled out as the most important feature of capitalist economies.
The most innovative and valuable companies of our time are the leading “technology platform” companies: Amazon, Apple, Facebook and Google – a group New York University Professor Scott Galloway simply labels “The Four.” Except for Apple, none of these companies existed before 1990. That they have eclipsed in the public mind – in such a relatively short amount of time – such other tech giants as Microsoft, Oracle, Cisco and Intel is a testament to the remarkable acumen of the founders and leaders of The Four, their highly skilled workforces, and to the economy and society that have enabled them to flourish.
President Trump’s nomination of Judge Brett Kavanaugh to fill the seat on the Supreme Court vacated by Justice Anthony Kennedy have left many to wonder: What will replacing an often swing vote with a more conservative one mean for health care? There are many pending cases in lower courts that, if they make it a more conservative Supreme Court, could define health policy for years to come.
Preexisting conditions
Nineteen conservative states, led by the Texas attorney general, are seeking to overturn the Affordable Care Act. The U.S. Department of Justice announced that it would not defend the law in court. The agency argued that with the abolishment of the individual mandate penalty in 2019, community rating and guaranteed issue — the rules that protect those with preexisting conditions — are unconstitutional. If the case makes it to the Supreme Court, the newest member could be a deciding vote on whether or not preexisting condition protections should continue.
Abortion
Though a recent poll found that both men and women support by a two-to-one margin Roe v. Wade, which struck down state laws restricting access to abortion, a number of abortion-related cases are working their way through lower courts. They directly ask critical questions, from at how many weeks abortion should be allowed to what type of facilities and providers can terminate a pregnancy. These cases could all be opportunities for the high court to preserve or limit access to abortion in the United States.
Two weeks ago, the U.S. Department of Justice (DOJ)filed a legal brief in support of a Texas lawsuit that would kill one of themost popular provisionsof the Affordable Care Act (ACA): the one that ensures people with past medical problems can get affordable health insurance. It’s the latest twist in the Trump administration’s unrelenting campaign to sabotage “Obamacare,” even if that means pricing sick Americans out of health coverage altogether.
The DOJ’s intervention raised eyebrows since it marked a further politicization of a federal agency whose mission is to enforce laws passed by Congress. Instead, it is trying to unravel the law that President Trump and his party failed repeatedly to “repeal and replace.” It’s an undemocratic run around the legislative branch, an attempt by President Trump to win in court what he could not win in Congress.
Generally speaking, if you have a preexisting condition — a chronic condition such as asthma, a past cancer diagnosis, or pregnancy — and are covered by Medicare, Medicaid, or private group insurance, you are protected financially from the costs of those conditions. But prior to the ACA, those in the individual, or non-group, market could be denied coverage for being sick or pregnant. In fact, 18 percent of individual market applicantswere deniedcoverage before the ACA and many more did not apply for coverage or were offered it only at unaffordable prices. Today, roughly 27 percent of adults(52 million people)not eligible for Medicare have preexisting conditions — these people would be the most at risk if these protections are thrown out.
The United States Conference of Mayors met in Boston last week, and a key topic was climate change. Mayors have been looking for ways to exert leadership on this issue, but one idea that should be tossed to the waste bin is suing America’s energy producers over so-called “climate change injuries.” These lawsuits, started by a handful of California mayors last summer, are orchestrated efforts to sue companies for doing nothing more than producing the energy we use every day. The litigation’s backers are actively recruiting mayors to file carbon copy lawsuits.
Progressives who care about climate change should not reflexively cheer or join this litigation. The lawsuits, the brainchild of a 2012 conference in La Jolla, California, of environmental activists and lawyers, are driven by private law firms. They seek to make energy companies pay for local infrastructure projects, such as sea walls. Let’s be real: Building a seawall around our coastline and making energy producers pay for it has as much to do with combatting climate change as Trump’s border wall has to do with illegal immigration — nothing but symbolism.
The George Mason University’s Law & Economic Center hosted its Twelfth Annual Judicial Symposium on Civil Justice Issues on Monday, May 11, 2018. The program included many pressing topics of liability, including innovator liability against branded pharmaceutical companies, climate change tort cases against energy producers, litigation financing, and the implications of the U.S. Supreme Court’s recent personal jurisdiction decisions. The panels were filled with skilled lawyers on all sides of the issues.
PPI Center for Civil Justice Director, Phil Goldberg, and Coleen Klasmeier of Sidley Austin debated Leslie Brueckner of Public Justice and Adina Rosenbaum of Public Citizen on the issue of innovator liability. Innovator liability is a novel theory for liability developed over the past 25 years by which users of generic drugs seek to subject branded drug companies to liability for the harms they allege were caused by the generic drug. The PPI Center for Civil Justice’s previous writing on this issue can be foundhere.
As Goldberg explained to the audience of state judges, innovator liability has been rejected by well-over a hundred federal and state courts, including several U.S. Courts of Appeal. These courts have all concluded that under traditional product liability law, a manufacturer of a product is subject to liability only for its own products, not the products of its competitors. Also, there are no other common law tort theories for establishing this liability because there is no legal relationship between the manufacturer of the branded drug and the user of the generic, and saddling branded drug manufacturers with the liability for all users of generic drugs could have devastating implications for America’s health care.
Therefore, as Goldberg said, “This issue involves determining both what’s best for America’s health care and the most appropriate liability policies. Innovator liability does not advance either and undermines both. Innovator liability is solely about finding a pocket to pay a claim . . . that is the very definition of deep pocket jurisprudence and should continue to be rejected by courts around the country.”
The reason this issue is particularly timely is that in the past six months, three state high courts have ruled on innovator liability claims. The Supreme Court of California allowed these theories for traditional negligence claims, whereas the high courts in Massachusetts and West Virginia continued the widespread rejection of such liability. The Supreme Court of Massachusetts would only allow innovator liability for acts of recklessness or gross negligence. Goldberg broke down all three rulings for the judges in showing how California isolated its law from the rest of the country in allowing for innovator liability.
In addition, Goldberg and Klasmeier fleshed out the West Virginia court’s concern that innovator liability would wreak havoc on the Hatch-Waxman Act, which is the federal law that created a delicate balance between generic and branded drugs and should not be undone through distortions in state tort law. In particular, Klasmeier suggested to the judges that the Food & Drug Administration be afforded primary jurisdiction on these issues because of the imbalance that innovator liability would cause.
In February, the George Mason Law & Economic Center held a similar briefing for members of the Congressional Civil Justice Caucus. A video to that presentation, which featured a debate between Goldberg and Brueckner can be foundhere. A lengthier law review article that Goldberg published on innovator liability can be foundhere.
Yesterday’s science day in a federal courtroom in San Francisco underscores the problem with the recent spate of climate change tort suits. These lawsuits, which we recently wrote about in The Hill, seek to impose massive liability against fossil fuel producers for selling energy products, including home heating fuel and gasoline for cars, that many scientists have determined contribute to global climate change. Rather than work through Congress and the Environmental Protection Agency on establishing sound policies, environmental lawyers are hoping to have a judge force the companies to reduce carbon dioxide emissions and pay for what they claim are climate change injuries.
On one hand, I admire Judge William Alsup, a Clinton-appointee who is hearing the case in San Francisco, for holding this science day. He clearly believes in immersing himself into the subject matter of a case so that he can grasp the allegations and ask good questions. He famously studied up on Java computer programming before hearing a dispute between Oracle and Google over the lines of code in the program. In preparation for hearing the climate change case, he asked the parties to educate him on topics ranging from what caused the ice ages to the molecular reasons that carbon dioxide absorbs infrared radiation.
Climate change public policies, though, are different from private disputes over JAVA or other technologies. They do not lend themselves to being resolved in litigation, where plaintiffs choose who to sue and trials are governed by rules of evidence. The allegations here go to the role of fossil fuels in powering the world. Our national energy policy involves balancing many complex political issues, including energy independence from foreign countries, accessibility of natural resources, affordability for American families and businesses, and environmental concerns, among others.
The last time climate change tort suits were brought, one of the cases (American Electric Power v. Connecticut) went all the way up to the Supreme Court. During oral arguments, Justice Ginsburg rightfully expressed concern about setting up a federal judge, such as Judge Alsup here, to become a “super EPA.” The Supreme Court dismissed the claims in American Electric Power, saying Congress and the EPA are “better equipped to do the job than individual district judges issuing ad hoc, case-by-case decisions.” Thus, in the end, it does not matter whether Judge Alsup can acquire the skills and knowledge to make these policy decisions. Establishing America’s energy policy is not his job to do.
Phil Goldberg is the Director of the Progressive Policy Institute’s Center for Civil Justice and Office Managing Partner for Shook Hardy Bacon LLP in Washington, D.C.
