issue: Regulatory Reform

The Hill: Universal Pensions: A Progressive Alternative to Retirement

Posted on by The Progressive Policy Institute

In the midst of the chaos of this election cycle, some important themes are emerging. In particular, voters are highly worried about retirement security. Indeed, 91 percent of voters in four swing states agree that most Americans are not prepared for retirement. That’s according to a poll by the Progressive Policy Institute (PPI), in partnership with veteran Democratic pollster Peter Brodntiz.

That’s why it’s time for a Universal Pension system that would help all U.S. workers save for retirement by eliminating the need to navigate the maze of tax-favored retirement plans, and making their job-based pensions portable. Specifically, the UP would reduce today’s welter of tax-favored retirement accounts into one universal IRA account (with a choice between a traditional or Roth-style IRA).

The accounts would be managed by private firms, under the supervision of the individual rather than the employer, giving workers more control over their investment choices. Furthermore, when workers switch jobs, they can rollover their existing 401(k) or other company pension plans into their Universal Pension reducing paperwork burdens and financial fees for both employers and employees.

And by helping all workers start saving for retirement from their very first day of work, the Universal Pension would harness the power of compound interest for everyone. It would help to close a yawning wealth gap at a time when wealth inequality is roughly 10 times wider than income inequality.

Continue reading at The Hill.

Transportation Topics: Infrastructure Permitting Project Delays Driving Up Costs, Experts Say

Posted on by The Progressive Policy Institute

PPI President Will Marshall was quoted on his thoughts about reforming America’s transportation infrastructure.

Infrastructure projects in the United States are taking up to 10 years to gain regulatory approval, a problem that is too often sending investors to other countries and driving up the costs of projects, several transportation experts said

An “accumulation of laws and regulations,” largely designed to protect the environment via environmental impact reviews, is bogging down approval of badly needed transportation projects and instead causing environmental damage, Will Marshall, president of the Progressive Policy Institute, said at a May 19 Infrastructure Week event here.”

Read the article in its entirety at Transportation Topics.

The Productivity Growth Slump and The Case of the (Missing) Contact Lens

Posted on by The Progressive Policy Institute

Productivity growth in the United States continues to slump.  The latest numbers from the BLS show that multifactor productivity growth was only a tiny 0.2% in 2015.

In particular, gross medical productivity of the US healthcare system fell by 1.2% in 2015, according to PPI’s calculations.* That’s after two years of ticking up slightly.

Falling gross medical productivity implies that healthcare employment is increasing faster than the population, even after adjusting for the changing age mix. That’s not fiscally or economically sustainable over the long run, because it means that healthcare is absorbing more and more of the workforce, and leaving less for other productive activities.

Is this negative productivity trend going to continue? The good news is that innovation in pharma, medical devices, and apps has the potential for reducing the amount of excess labor costs in the healthcare system (see, for example, “The Folly of Targeting Big Pharma,” WSJ, December 10, 2015).

The bad news is that some groups of medical providers are looking to retain or even extend inefficient and costly practices by fighting back against new technologies and online delivery systems. For example, the trade group for optometrists recently filed what they called an “expansive” FDA complaint against a vision-texting app. This app would cut costs and save labor by letting people test their vision at home and send the data to a licensed ophthalmologist for a prescription.  Similarly, the optometrists also support a new bill in the Senate that would make it harder and more expensive for consumers to use valid prescriptions to buy their contact lens online, even at a time when more and more shopping is done via the Internet.**

The U.S. needs to embrace productivity growth in the healthcare sector if overall productivity and living standards are to rise for everyone. Hopefully 2015 will turn out to be a blip rather than a trend.

*Gross medical productivity is defined to be the age-adjusted population, divided by the number of workers in the broad healthcare sector, and benchmarked to 2009=100. The population is adjusted for the relative cost of health care at different ages. The broad healthcare sector includes private and public hospitals, ambulatory care facilities, nursing homes, pharma and medical device manufacturers, biotech companies, and health insurers.

Gross medical productivity is an easy-to-calculate measure of how well the health care system is using labor resources to treat the potential patient population. Labor is important because it accounts for a large share of the cost of health care. We use age-adjusted population as the numerator because any of us—no matter how healthy—can become an involuntary consumer of healthcare at any moment.

** PPI first wrote about this issue in 2001, in a policy paper entitled “The Revenge of the Disintermediated: How the Middleman is Fighting E-Commerce and Hurting the Consumer.”

PPI Poll: Swing Voters In Swing States Hold Balance In 2016

Posted on by The Progressive Policy Institute

In this era of political polarization, it is tempting to assume the political center no longer exists. If this were true, it would certainly simplify things for political candidates and their strategists. They could stop worrying about how to persuade unaligned voters and concentrate exclusively on mobilizing their core partisans. However, this is not the case. As this new Progressive Policy Institute (PPI) poll by veteran Democratic pollster Peter Brodnitz shows, Swing voters exist, and they hold the balance of power in key 2016 battleground states. For Democrats especially, this survey yields a clear lesson: To hold the White House, recapture the Senate, and reduce the Republican House majority, candidates must craft messages that appeal beyond the party’s base to a substantial body of voters who are not in a fixed ideological camp.

This survey examined the outlook and attitudes of Swing voters in four critical Swing states: Florida, Ohio, Colorado, and Nevada. Constituting about a fifth of the electorate in those states, Swing voters come at today’s major challenges with a perspective different from that of either party. In general, they are less ideological, less partisan, and less angry than base voters. They are pragmatists who are focused mainly on economic growth and competitiveness.

Swing voters give low approval ratings to both parties in Congress, but slightly higher approval ratings to Democrats (32% approve, 59% disapprove), than to Republicans (28% approve, 65% disapprove). While Republicans give their own Members of Congress better marks than Democrats, Republicans in Congress are underwater among their own voters by eleven points (43% approve, 54% disapprove). Democrats, on the other hand, largely approve of the jobs their Members of Congress are doing (73% approve, 24% disapprove).

There is widespread agreement among battleground voters on a number of matters:

  • Most battleground voters rate the economy as fair or poor as opposed to excellent or good. They believe that improving the economy should be the priority, that moving jobs overseas is a key economic problem, and that increasing access to education and job training is essential.
  • Most of them also believe that America’s economy is still strong, and that if people work hard, they can get ahead.
  • Almost all believe it is essential that American companies can compete globally and that workers benefit from that competition and success.
  • While Democrats are the most likely to believe the United States is the strongest economic power in the world (81% agree), most Swing voters (58% agree) and Republicans (61%) hold this view.
  • Despite all the populist rhetoric deployed in both parties’ nominating contests, the voters we interviewed don’t seem particularly angry. Swing voters tend to be worried about the economy and Democrats tend to be optimistic, but few described themselves as angry.

Most believe global competition – more than trade agreements – is the force driving away jobs. There is little support among Swing voters for ending trade agreements, and most believe the benefits of trade agreements outweigh the costs.

  • Almost all believe “most” Americans are not prepared for retirement.
  • Almost all believe increased investments in infrastructure, like roads and bridges, would improve the U.S. economy.

In general, Swing voters are attracted to new ideas for stimulating growth — regulatory improvement, low corporate taxes intended to increase competitiveness and keep jobs from moving overseas, and a robust career pathways system that’s always there to help workers acquire marketable skills.

 

Download “2016.04-PPI-Poll_Swing-Voters-in-Swing-States.pdf”

CNN: America needs more than populist message

Posted on by The Progressive Policy Institute

With Donald Trump and Ted Cruz locked in a bitter battle for the Republican nomination, the stakes in 2016 rise dramatically. The likely victory of either one of these deeply flawed candidates will give Democrats a chance not only to hold the White House, but also to realign U.S. politics. No wonder Republicans are panicking.

To seize the opportunity, however, Hillary Clinton will need to transcend the limits of a “populist” message based on identity politics, economic victimhood and redistribution. Thus far such themes have dominated the nomination battle with Sen. Bernie Sanders, but they won’t help Democrats forge a broader political coalition that includes suburban moderates, college-educated independents and many Republicans who are aghast at the prospect of branding the White House with a giant “T.”
Of course, with yet another caucus victory on Saturday, this time in Wyoming, Sanders will stay in the race, if only to keep tugging Clinton to the left. But Clinton needs to resist this ideological gravity, because Sanders’ left-wing populism is not an effective answer to the right-wing populism that Trump channels with such diabolic cunning.
Before the Bernie Bots clank into action, let me hasten to say I’m not positing moral equivalence between Sanders and Trump. Sanders is honest, principled and decent; Trump is, well, none of those things. But the lifelong socialist’s dream of turning America into a paternalistic, European-style welfare state isn’t the right prescription for what ails our country.
Continue reading at CNN.

Forbes: The Progressive Policy Institute’s Push to Cut Bureaucracy

Posted on by The Progressive Policy Institute

Forbes contributor Jared Meyer recently interviewed PPI’s chief economic strategist Dr. Michael Mandel on regulatory reform and economic growth.

The Progressive Policy Institute recently released a report titled “Unleashing Innovation & Growth.” The report covers a comprehensive list of public policy topics, including reforming America’s growing level of federal regulation. In what follows, PPI’s chief economic strategist Michael Mandel explains why pro-growth regulatory policies offer an alternative to the populist sentiments that are influencing both sides of the political spectrum.”

Read the interview in its entirety at Forbes.

Press Release: PPI Unveils New Blueprint for Shared Prosperity

Posted on by The Progressive Policy Institute

FOR IMMEDIATE RELEASE
March 15, 2016

Contact: Cody Tucker, 202-775-0106
or ctucker@ppionline.org

A Progressive Alternative to Populism

PPI Unveils New Blueprint for Shared Prosperity

WASHINGTON—The Progressive Policy Institute (PPI) today released Unleashing Innovation and Growth: A Progressive Alternative to Populism, a new blueprint for renewing America’s economic dynamism.

The plan offers an array of creative proposals for accelerating the “digitization” of the physical economy; lowering regulatory obstacles to innovation and entrepreneurship; launching a new public works push; adopting pro-growth tax reform; grooming the world’s most talented workers; and enabling working families to escape poverty and build middle class wealth.

The blueprint also takes aim at the populist anger that has figured prominently in campaign 2016:

…[P]opulists do Americans no favors by claiming the economic game is hopelessly rigged against them, that the leaders they elect are incompetents, or that our democracy is rancid with corruption. None of these claims is true, and such demagoguery undermines public confidence in America’s boundless capacity for self-renewal. Populist anger fosters an ‘us versus them’ mentality that, by reinforcing political tribalism and social mistrust, can only make it harder to build consensus around economic initiatives that benefit all Americans.

“We believe progressives owe U.S. voters a hope-inspiring alternative to populist outrage and the false remedies of nativism, protectionism and democratic socialism,” writes Will Marshall, PPI President.

“I encourage anyone looking for optimistic ideas to create more jobs, wealth, and prosperity for hard working Americans to read PPI’s new report using innovation to spur growth,” said Congressman Ron Kind (D-Wis.), Chairman of the New Democrat Coalition. “This report is full of forward thinking policy initiatives that help grow the American economy.”

“In the midst of today’s populist uprising, it’s up to our leaders to recognize the real reasons why our economy isn’t working for everyone and to fight for effective solutions,” said Governor Jack Markell (D-Del.). “PPI’s blueprint gives policymakers a roadmap to create opportunity for all Americans by harnessing the unstoppable forces of globalization and technological innovation, while opposing the impractical, and sometimes dangerous, proposals offered by the political extremes.”

The anger on which populists feed is rooted in a real economic problem: America has been stuck in a slow growth trap since 2000. This long spell of economic stagnation has held down wages and living standards and shrunk the middle class. What the nation needs is a forward-looking plan for moving the U.S. economy into high gear. Instead, as the PPI blueprint notes, today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building new American prosperity in today’s global knowledge economy.

Unleashing Innovation and Growth seeks to fill this vacuum in the presidential campaign, offering bold ideas for unleashing the collective ingenuity of the American people—harnessing disruptive change, raising skills, lowering tax and regulatory barriers to individual initiative and creativity, and experimenting with innovative ways to rebuild middle class wealth and enable more Americans to exit poverty.

Summary of Key Proposals

Unleash Innovation
• Spread innovation across the economy: Adopt a new “Innovation Platform” aimed at stimulating public and private investment in new ideas and enterprises, and at diffusing innovation across the entire economy.
• Improve the regulatory climate for innovation: Tackle the mounting costs of regulatory accumulation, the constant layering of new rules atop old ones; Make systemic changes to regulatory agencies to make promoting investment, innovation and new enterprises part of their core mission; Rein in occupational licensing requirements that screen out many low-income entrepreneurs; Lift outdated restrictions on lending to small business; give businesses incentives to offer more flexible work, including paid leave.
• Innovate our way to clean growth: Implement a more innovative energy strategy that simultaneously advances two vital interests: powering economic growth and assuring a healthy environment; Recognize that, for the foreseeable future, the U.S. and the world will have to tap all fuels—renewable, nuclear, and fossil—to meet growing energy demand and sustain global economic growth; Institute a nationwide carbon tax to curb greenhouse emissions while driving investment to clean and efficient energy.
• Democratize trade: Sell more of America’s highly competitive exports to a growing global middle class; promote the free flow of data across global borders; support innovative trade agreements, like the Trans-Pacific Partnership (TPP), that lift labor, environment and human rights standards in developing countries and enable more Americans to benefit from trade; Seize new opportunities for U.S. small businesses and entrepreneurs to use low-cost digital platforms to tap into global growth.

Align Fiscal Policy with Innovation and Growth
• Embrace pro-growth tax reform: Advocate for a dramatic shift from income to consumption taxes to stimulate investment in productive economic activities rather than those favored by the current tax code; Close loopholes that benefit special interests and dramatically simplify taxes for most Americans; Raise enough money to cut corporate income taxes down to globally competitive levels, and reduce taxes that penalize innovation and hiring.
• Modernize public works: Accurately measure the true economic impact of infrastructure spending; open infrastructure markets to private capital; define a strategic role for Washington through a national infrastructure bank; impose firm deadlines on project approvals and licensing process.

Groom the World’s Most Talented Workers
• Reinvent public school: Champion new models of school governance that enable more school autonomy and innovation, more customized learning, rigorous standards, and genuine accountability and results.
• Create new pathways into middle class jobs: Create a more promising approach to “career pathways” by combining classroom training and work experience through a sequence of jobs, within or across firms in an industry, and a sequence of credentials that signal their growing skill levels.
• Cut college costs for everyone: Rein in costs and decrease debt by encouraging colleges to offer three-year degrees rather than the traditional four-year program and focus policies on competency, rather than credit hours.

Build Middle Class Wealth
• Narrow the wealth gap with universal pensions: Champion “universal pension” accounts that would enable all workers to save for retirement, navigate the maze of tax-favored retirement plans, and take their pensions with them when changing jobs.
• Help families save for homeownership: Tackle the twin problems of declining homeownership and souring housing costs for both owners and renters by creating a new, tax-preferred mechanism for down payment savings—“Home K”—to lower obstacles to homeownership, like tight credit and down payment requirements, for first-time homebuyers and to promote savings.

Fight Poverty with Empowerment
• Empower people with smart phones: Use modern technology to cut through bureaucratic barriers to government safety net programs, consolidate benefit streams, enable people living in poverty more access to the information they need, and apply online for social supports; Encourage federal, state, and local governments to create online H.O.P.E. (Health, Opportunity, and Personal Empowerment) accounts and action plans.
• Expand housing choices for low-income Americans: Convert some federal rent subsidies into incentives for homeownership to relieve the burden on low-income families of high housing costs and reduce the waiting list for subsidized housing, without raising taxes or adding to the federal deficit.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism.

Unleashing Innovation and Growth: A Progressive Alternative to Populism

Posted on by The Progressive Policy Institute

As Americans choose a new president in 2016, populist anger dominates the campaign. To hear Donald Trump or Senator Bernie Sanders tell it, America is either a global doormat or a sham democracy controlled by the “one percent.” These dark narratives are caricatures, but they do stem from a real dilemma: America is stuck in a slow- growth trap that holds down wages and living standards. How to break this long spell of economic stagnation is the central question in this election.

Today’s populists peddle nostalgia for our country’s past industrial glory but offer few practical ideas for building a new American prosperity in today’s global knowledge economy. Progressives owe U.S. voters a hopeful alternative to populist outrage and the false panaceas of nativism, protectionism, and democratic socialism. What America needs is a forward-looking plan to unleash innovation, stimulate productive investment, groom the world’s most talented workers, and put our economy back on a high-growth path. It’s time to banish fear and pessimism and trust instead in the liberal and individualist values and enterprising culture that have always made America great.

Download Unleashing Innovation and Growth: A Progressive Alternative to Populism

Washington Post: The new Democratic Party proposal to rival Bernie Sanders’ socialism

Posted on by The Progressive Policy Institute

Simplicity is one of Bernie Sanders’ great strengths: Corporations and the rich have rigged the economy. His solutions sound simple, even when the plans behind them are complicated: college for all, health care for all, tax the rich, break up big banks. He trails Hillary Clinton in presidential delegates to this point, and he remains an underdog for the Democratic nomination, but Sanders has already pulled Clinton, and the party, toward a more populist, more socialist policy agenda, thanks in part to that clarity of message.

The centrist Democrats who oppose that leftward lurch have struggled to match his simplicity. They tend to view the economy through a lens of skills and adaptation, not power and treachery. Many of them pushed in the 1990s, under President Bill Clinton, to expand global trade and deregulate the financial sector. They now concede those efforts did not go according to script, particularly for middle-class workers, but they are not calling for a full rewrite in response.

Their risk, in this election and moving forward, is to define themselves solely as anti-Democratic-socialist – the folks who don’t like the stuff that a lot of Democrats like about Sanders.

The Progressive Policy Institute is the latest centrist Democratic institution to try to counter that image. Today it will release what its president, Will Marshall, calls a “radical” agenda to get America working for the working class again. The report is called “Unleashing Innovation and Growth: a Progressive Alternative to Populism,” and it is organized around a straightforward, if not perfectly simple, principle.

Read more at The Washington Post

Long-term U.S. Productivity Growth and Mobile Broadband: The Road Ahead

Posted on by The Progressive Policy Institute

The next generation of wireless is on the horizon.1 While the standards for 5G are not yet finalized, it’s clear that when 5G does arrive, it will mean faster streaming video, lower latency, and higher capacity. Companies such as AT&T, Verizon, T-Mobile, Ericsson and Nokia are in test mode, with widespread consumer rollout of 5G expected by 2020, or perhaps earlier.

At the same time, the attention of the mobile providers is focused on the spectrum auctions scheduled to start later in 2016. These auctions could make a significant contribution to freeing up spectrum for mobile data, and perhaps help reduce the short-term spectrum deficit.2 Meanwhile, the Federal Communications Commission (FCC) has started exploring the use of “millimeter wave” frequencies (mmW) for mobile services, a move that could potentially open up much more spectrum in the medium- and long-run.3

But nothing is assured. In the short-term, network engineers and others are already indicating that the upcoming auctions are not going to be a complete answer to forestalling capacity crunches in the years ahead. In the medium and long-term, mmW could be the next great swath of spectrum beachfront but the promise of that technology is in its early stages. Policy actions, especially around the availability of spectrum and around business models, can have long lag times. Understanding the broad contours of the long-term relationship between wireless and economic growth may help influence today’s policy decisions.

This paper focuses on 2030 and the potential of future wireless networks to support economic growth in the United States.4 We consider the economic implications of next generation wireless networks for long-term productivity growth and living standards, and relate those to current public policy questions. The result could be an acceleration of productivity growth in the physical industries that adds roughly $2.7 trillion (in 2015 dollars) to U.S. GDP by 2030. This translates into an 11 percent increase in economic output, which is equivalent to boosting the average annual growth rate by 0.7 percentage points.

Download “2016.03-Mandel_Long-term-US-Productivity-Growth-and-Mobile-Broadband_The-Road-Ahead”

Federal Agencies Should Investigate on Reasonable Fears, But Regulate on Science

Posted on by The Progressive Policy Institute

In November, the Food & Drug Administration approved for the first time a modified, fast-growing salmon for human consumption. More than five years ago, FDA accepted a risk assessment’s conclusion that the modified fish was safe to eat and posed no threat to the environment. The FDA re-opened the process for additional comment because critics challenged the science, among other things. This landmark decision to go forward spotlights two key issues: the importance of assuring scientific integrity of government regulations, and a key difference between how North American regulators view science from their European counterparts.

Major enhancements in human and environmental health impact studies have allowed regulators to dive deeper into scientific determinations, but they also have given partisans tools to obfuscate the dialogue. In litigation, important causation decisions are expected to be based on battles of opposing experts, but the regulatory process is supposed to be less partisan where subjective agendas are set aside for real science. People must believe FDA, for example, when it approves a drug as safe and effective for its labeled indications. When the Environmental Protection Agency, Center for Disease Control or other agency issues exposure guidelines for potentially harmful substances, it should reflect the best scientific knowledge. Scientific understanding evolves, and these regulations and standards should reflect those advancements.

For progressives, the importance of this process is more than just assuring that regulations are appropriately tailored to known risks. It is essential for protecting the integrity of the government and the regulatory process itself. Thus, while competing viewpoints on the science may infect submissions to federal agencies, just like they do in court, it is the agencies’ responsibility to make decisions that are not unduly influenced by partisans on any side. Submissions from all stakeholders, including both for and against industry, should be treated with the same scrutiny so that agencies are not unduly influenced by anyone’s tainted lenses.

For modified salmon, reopening the investigation affirmed the initial results. A few years ago, the Canadian Environment Minister reversed course when reopening its rulemaking on siloxanes. Siloxanes have been used since the 1940s in a variety of household products, including deodorants, shampoos and cosmetics. It gives these products a smooth, non-greasy texture that helps in their applications. When the products are used, the siloxanes either evaporate into the air or wash off and go down the drain.

In the early 2000s, scientists in Norway developed computer modeling suggesting that siloxanes, namely those known as “Siloxane D5,” could have adverse environmental impacts. Computer modeling has become an increasingly useful tool in assessing health and environmental risks, but it has obvious limitations given that it is not based on actual results such as epidemiological studies. In 2006, Canadian officials began reassessing its rules for Siloxane D5. In 2009, Canada issued a proposed order to add Siloxane D5 to its Toxic Substances List, which much like California’s Proposition 65 leads to significant restrictions on product use.

Before the new rule took effect, the Silicones Environmental Health and Safety Council of North America filed a Notice of Objection requesting an expert Board of Review to investigate the integrity of the modeling. Canada’s Minister of the Environment appointed three independent, highly respected toxicologists to this review panel. This was the first time an official Board of Review was used in Canada since it adopted this process for potentially serious and irreversible threats in 1999. The panel conducted a multi-disciplinary evaluation of the nature and extent of any hazards posed by D5 to the environment and biological diversity.

In 2011, the Board of Review issued a report concluding that the modeling used to predict Siloxane D5 in the environment was wrong. What they found was that regardless of whether Siloxane D5 entered the environment in the ground or air, it migrates to the air and degrades rapidly. As a result, “it is virtually impossible for Siloxane D5 to occur in any environmental matrix at concentrations sufficient to produce harm to the environment,” and that “Siloxane D5 does not pose a danger to the environment or its biological diversity.”

The Board further found that a key error in the modeling was that it used other types of silicone as surrogates for the physical and chemical properties of Siloxane D5. It then recommended better transparency for how modeling is developed and that agencies have better means for reviewing regulations to make sure they reflect the best scientific knowledge. In 2012, the Canadian Minister of the Environment endorsed the findings and removed Siloxane D5 from its list of toxic substances.

Last summer, the Norwegian scientists at the center of the allegations reportedly acknowledged that field studies showed conflicting results. The article from the High North Center for International Climate and Environmental Research that included the scientists’ remarks ironically was published around the same time that European regulators decided to move forward with their own restrictions on siloxanes. European regulators should learn from Canada and look beyond modeling. Just last year, the U.S. Trade Representative called out European regulators on genetically modified foods and feed, saying they were “ignor[ing] science-based safety and environmental determinations.”

In the end, what matters most is getting the science right. With modified salmon and siloxanes, U.S. and Canadian officials demonstrated this point by re-opening an investigation to assure a thorough understanding of the science. Like the scientific process itself, this approach to regulation encourages good faith skepticism, honest debate, and confidence in the regulations themselves. Most people, whether in Canada, Europe or the United States, understand that government investigations may be based on suspicions, but regulations must be based on science.

This is cross-posted on the Huffington Post.

PPI WEEKLY WRAP-UP: PPI in Europe, State AGs Abusing Power, & U.S. App Economy Capitol Hill Briefing

Posted on by The Progressive Policy Institute

PPI IN EUROPE: PPI Chief Economic Strategist Dr. Michael Mandel was in Brussels this week, where he was invited to speak at an event on small and medium-sized enterprises (SMEs) and the Digital Single Market. The event was sponsored by the Swedish, Finnish, Irish and Estonian Permanent Missions to the European Union. While there, he and PPI Executive Director Lindsay Lewis held several meetings with the European Commission.

STATE AGs ABUSING POWER: In an op-ed for RealClearPolicy, Phil Goldberg, Director of the Civil Justice Center at PPI, details the evolution of the role of state attorney general over the last 20 years from mere law enforcer to general policymaker:

“Today, both Democratic and Republican AGs use litigation and the powers of the office to regulate. But with this new responsibility comes new opportunities to breach the public trust.

“A particularly alarming development is AGs’ increasing use of private law firms to sue companies under no-bid contracts where the firms get percentages of the settlements or awards. These arrangements were born out of tobacco litigation in the 1990s and have spread to all sorts of actions, leading to several scandals over the connections between AGs and the firms they hire.

“An aggressive way to address the politicization of the state AG is to have the AG selected by the governor, rather than through a popular election where he or she must raise campaign funds. The states that select their chief law enforcement officers this way have seen fewer scandals. For now, though, states should adopt legislation such as [the Transparency in Private Attorney Contract Act] to ensure that law-enforcement actions brought on behalf of the state put the public good above private profits.”

U.S. APP ECONOMY CAPITOL HILL BRIEFING: Please join PPI and TechNet next Thursdayfor a Capitol Hill breakfast briefing on “App Economy Jobs in the United States.” The event will feature remarks by Congressman Mike Bishop (R-MI), followed by a panel discussion featuring:

  • Dr. Michael Mandel, Chief Economic Strategist, PPI
  • Terry Howerton, CEO, TechNexus Venture Collaborative
  • Ron Klain, Executive Vice President & General Counsel, Revolution, LLC
  • Linda Moore, President & CEO, TechNet
  • Brendan Peter, Vice President, Global Government Relations, CA Technologies
  • Karl Rectanus, CEO, Lea(R)n
Thursday, March 3, 2016
10AM to 11:30AM
2226 Rayburn House Office Building
 
RSVP to rsvp@technet.org

Real Clear Policy: When State AGs Abuse Their Power

Posted on by The Progressive Policy Institute

In recent years, several states have seen their attorneys general mired in some kind of scandal. Pennsylvania is the most recent example. This trend, while disturbing, is not surprising: The role of the state attorney general has evolved over the past 20 years from mere law enforcer to general policymaker. Today, both Democratic and Republican AGs use litigation and the powers of the office to regulate. But with this new responsibility comes new opportunities to breach the public trust.

A particularly alarming development is AGs’ increasing use of private law firms to sue companies under no-bid contracts where the firms get percentages of the settlements or awards. These arrangements were born out of tobacco litigation in the 1990s and have spread to all sorts of actions, leading to several scandals over the connections between AGs and the firms they hire.

A key reform states can enact is the Transparency in Private Attorney Contract (TiPAC) Act. More than a third of the states, often with broad bipartisan support, have enacted TiPAC or similar bills. These laws do not outright ban contracts with private law firms, but they subject the contracts to commonsense regulations. For example, they mandate public bidding, require the posting of contracts on websites, limit attorney’s fees, demand that firms keep appropriate records, and mandate complete control of the litigation by the government.

To continue reading the entire article, visit Real Clear Policy.

The Wall Street Journal: Marshall on Anger with Wall Street

Posted on by The Progressive Policy Institute

In his analysis of how the two parties still do not agree what caused the 2008 financial crisis, Nick Timiraos of The Wall Street Journal quotes PPI president Will Marshall:

Anger at Wall Street among primary voters in both parties illustrates how “extreme antibusiness populism on the left is intersecting with extreme antigovernment populism on the right,” said Will Marshall, president of the Progressive Policy Institute, a centrist Democratic think tank.

Read the article in its entirety at The Wall Street Journal.

PPI to Congress: Scrub the SCRUB Act

Posted on by The Progressive Policy Institute

House Republicans this week are expected to take up the ponderously titled Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB) of 2015 (H.R. 1155). The Progressive Policy Institute, a strong advocate for regulatory improvement, urges progressives to oppose this highly partisan bill.

Over the last three years, PPI has worked with reform-minded Democrats and Republicans in Congress, as well as Independent Senator Angus King, to develop a more effective way of dealing with the problem of “regulatory accumulation,” the relentless buildup of rules over time. Sadly, House Republicans have chosen to ignore a bipartisan bill—the Regulatory Improvement Act of 2015 (H.R. 1407)—in favor of the SCRUB Act, a conservative favorite that stands little chance of winning Democratic support.

Both bills have in common the creation of an independent commission charged with winnowing outdated, duplicative or overly burdensome federal regulations. There, the similarities mostly end. And while the House’s latest version of the SCRUB Act clearly has been tweaked in response to criticism from regulatory experts, it still fails on three grounds:

First, the bill caters to conservative demands to roll back existing regulations and make it harder to issue new ones. Rather than mandate careful consideration of rules widely thought to be in need of elimination or improvement, it requires the commission to cut regulatory costs by 15 percent—an arbitrary goal with no clear policy rationale. And while SCRUB’s vague, nonbinding language gives priority to examining “older major rules,” it could open the door to fresh assaults on favorite conservative targets: rules implementing Obamacare, the Dodd-Frank financial reforms, and the Environmental Protection Agency’s Clean Power Plan. The Regulatory Improvement Act, on the other hand, explicitly prohibits consideration of rules less than ten years old by its commission.

Second, the SCRUB Act enshrines a foolishly impractical “Regulatory Cut-Go” mandate. Under this procedure, no federal agency could issue a new rule unless it cut old ones that impose equal “costs” on the economy. The idea is to offset the cost of new regulations by killing old ones. This attempt to make regulation a zero-sum game would create pressures to target cost-effective rules for elimination based on highly imprecise estimates of what a new rule might cost—and with no consideration of the many public benefits of regulation.

Third, the SCRUB Act has zero support among House and Senate Democratic leaders or within the Obama administration. As a conservative “message” vehicle, rather than a serious legislative proposal, the bill will likely die in the Senate before it can be vetoed. In contrast, the House version of the Regulatory Improvement Act introduced by Congressmen Patrick Murphy (D-FL) and Mick Mulvaney (R-SC), has an equal number of Democratic and Republican co-sponsors. Defying the logic of polarization, it builds political support for smarter regulation from the center out.

At the core of this legislation is the Regulatory Improvement Commission—an independent, bipartisan commission under Congressional authority ensuring there is no hidden regulatory agenda. Consisting of nine members appointed by the president and Congress, the commission, after a formal regulatory review, would submit a list of regulatory changes to Congress for an up-or-down vote without amendment. This approach would build political trust and lay the groundwork for further rounds of regulatory review and revision.

Most important of all, the Regulatory Improvement Commission would lift the burden of regulation accumulation from the backs of U.S. workers, businesses, and taxpayers. It would reduce compliance costs and—most crucially—the opportunity costs that accrue when entrepreneurs and business managers spend their energies on complying with unnecessary rules rather than creating value.

PPI urges progressives to support a more politically viable mechanism for improving the regulatory environment for economic innovation and growth—the Regulatory Improvement Act.

Innovation in a Rules-Bound World: How Regulatory Improvement Can Spur Growth

Posted on by The Progressive Policy Institute

Economists and policymakers are always lauding innovation. In its purest form, innovation is like a free lunch: it boosts growth and incomes, creates good jobs, and opens up new possibilities for social reform and social mobility.

Today, innovation is needed more than ever. Productivity growth has been slowing in recent years. The 10-year growth rate of nonfarm business labor productivity is only 1.3 percent in 2015, compared to 3 percent as recently as 2005. A full one percentage point of that 1.7 percentage point decline, or more than half, is due to a slowdown in the growth rate of multifactor productivity, an indicator of innovation. In other words, the economic evidence suggests that this is an era of relatively weak innovation, outside of information technology.

Indeed, encouraging innovation is more essential than ever before. Fortunately, industries such as health care, education, finance, and tech are attempting to adopt new technologies that offer the chance of faster growth and higher wages, desperately needed to overcome years of stagnation.

But regulators, both in Washington, and at the state and local level, struggle with a rapid pace of innovation. Innovation, especially disruptive innovation, embodies unpredictability, change, and the creation of new products and markets. By contrast, regulators thrive on rules and predictability. They maintain a process of identifying an existing market failure and then issuing regulations that aims to make consumers and society better off by correcting that failure. The regulation process is far more straightforward when markets change slowly and predictably.

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