issue: Regulatory Reform

New Ideas for a Do Something Congress No. 6: Break America’s Regulatory Log-jam

Posted on by The Progressive Policy Institute

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.

The steady accumulation of regulations raises compliance and opportunity costs for businesses, especially small enterprises, putting obstacles in the way of economic innovation. Dozens of agencies in Washington issue new rules, but not one is dedicated to retiring old ones. To fill this institutional vacuum, 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examine old rules and present Congress with a package of recommendations for an up-or-down vote to eliminate or modify outdated rules.

 

THE CHALLENGE: REGULATORY ACCUMULATION DAMPENS AMERICA’S ECONOMIC VITALITY

Wise regulation is essential to facilitate market competition, protect public health and safety, and keep powerful economic actors honest. But as PPI has pointed out in a series of reports, even if any particular regulation is defensible, the sheer accumulation of rules over time can dampen economic vitality (1). New regulations can interact with old ones in unintended ways, and business owners end up spending more time trying to navigate and comply with proliferating rules rather than on growing their companies.

  • Federal regulations hardly ever die, resulting in a dense thicket of rules that raise costs for America’s entrepreneurs and economy.

As shown in Figure 1, the Code of Federal Regulations has steadily grown in size over time, swelling to a record 186,374 pages in 2017 (2). Because the extent of regulation can be difficult to measure, the Code of Federal Regulations’ size is commonly used to provide a sense of the scope of regulations businesses and consumers must comply with. Measured another way, the Federal Register (where the federal government prints new rules) published 61,950 pages in 2017 alone, including proposed rules, final rules, and notices.

Spread across every sector, regulatory accumulation acts as a drag on the economy. One often-cited 2010 study for the Small Business Administration placed just the direct cost of compliance with all federal regulations at $1.7 trillion in 2008, or $15,584 per household (3). A 2012 consulting study for the Manufacturers Alliance for Productivity and Innovation estimated the cumulative cost of major regulations for manufacturers to be $164 billion in 2011 (in constant dollars), double the cost just 10 years earlier. More recently, a 2017 National Small Business Association survey estimated that the average small business owner spends at least $12,000 every year on compliance, with nearly one in three spending more than 80 hours every year dealing with federal regulation (4).

The Trump Administration’s “2-for-1” approach to deregulation fails to distinguish between vital rules and those that tax innovation and growth.

  • President Trump frequently brags about his efforts to provide business with regulatory relief, but his 2017 executive order requiring the elimination of two regulations for each new regulation is the wrong approach. It raises the bar for issuing new regulations without creating a rigorous mechanism for pruning old ones (5).

In addition, Trump’s 2-for-1 scheme fails to distinguish between the kinds of regulations that are reasonable for public health and economic stability or would enhance market competition and those that might be unnecessary or harmful to innovation and growth. Setting aside its conceptual flaws, Trump’s approach has so far not had much practical effect either. According to a Brookings Institute analysis, the Administration’s approach to regulation has largely been one of inaction, and the most consequential “deregulatory” maneuvers have actually been undertaken by the GOP Congress through the wholesale legislative reversal of important Obama-era rules, such as on environmental protection (6). Neither outcome leads to the sort of effective regulatory framework our economy needs.

 

THE GOAL: IMPROVE THE REGULATORY ENVIRONMENT TO UNLOCK ENTREPRENEURIAL GROWTH

Washington needs a mechanism for systematically eliminating regulatory obstacles to economic innovation and entrepreneurship while protecting public safety and ensuring fair competition. Improving the regulatory climate would help inventors and entrepreneurs spend less time and resources on regulatory compliance and focus instead on delivering goods and services and growing their enterprises. A smarter regulatory regime would also realize savings for taxpayers, as less money would need to be spent on enforcement.

While Democrats see the value in responsible regulation that has an important societal function, Republicans take the general view that less regulation is always preferred to more, and that too many regulations of any kind hamper economic growth and potential business investment. These differences in opinion result in incompatible ideas for what regulatory reform should look like.

The answer to outdated, conflicting, or costly rules isn’t deregulation, but the constant updating, streamlining, and improving of our regulatory system. PPI’s proposal for a Regulatory Improvement Commission (RIC) bridges the stale, gridlocked debate on the merits of regulation between Democrats and Republicans, presenting a measured and bipartisan mechanism for improving the regulatory environment to catalyze innovation while also protecting public interests. The RIC would fill an institutional vacuum in regulation policy by creating a mechanism for the periodic clearing out of obsolete rules. Importantly, the RIC has no mechanism by which it can inhibit policymakers’ ability to create critical new rules to address threats to competition or public health and safety. Rather, the RIC would be designed to address only existing regulations that have accumulated over time and are now obsolete.

 

THE PLAN: ESTABLISH REGULATORY IMPROVEMENT COMMISSION TO DEAL PERIODICALLY WITH THE BUILD-UP OF OLD RULES

Washington has dozens of agencies that issue new rules, but not one institution dedicated to streamlining the accumulated body of regulations. To fill that vacuum, Congress should set up a regulatory version of the Defense Base Realignment and Closure Commission (BRAC), which has resulted in the successful closure of more than 350 obsolete installations since the late 1980s. That panel offers a rare example of bipartisan success in accomplishing a politically difficult mission – shutting down old military bases that the Pentagon deemed no longer necessary, but which had influential constituencies in communities around the country.

The RIC would be an independent commission of eight members, appointed by the President and Congress, with regulatory expertise across industry and government. It would meet as authorized by Congress to review and, following a public comment period of 60 days, draw up a list of 15 to 20 rules for elimination or modification. The package would be sent to Congress for an up-or-down vote, and the RIC would be disbanded. If the proposed changes pass Congress, they would go to the president’s desk for signature or veto. The RIC would need to be re-authorized each time Congress would like to repeat this process. Such continued re-authorization is important, as it provides an inexpensive method to solve the problem of regulatory accumulation compared to a standing committee and avoids the creation of a new government bureaucracy.

In 2015, bipartisan groups of lawmakers introduced bills in the House and Senate to establish a Regulatory Improvement Commission based on the BRAC model. House cosponsors included Mick Mulvaney (R-SC), now acting White House Chief of Staff, and Kyrsten Sinema (D-AZ), now a Democratic Senator from Arizona. Unfortunately, the incoming Trump administration ignored the bipartisan RIC bills in favor of anti-regulation bills supported only by Republicans.

The RIC offers an alternative to the witless binary approach to regulation poised by extreme partisans on both ends of the spectrum. Obviously, America’s massive and complex economy needs smart regulation to function properly, and we need institutions charged with constantly improving our regulatory environment, rather than simply piling new rules atop old ones.

In this way, the RIC would fill a vacuum in Washington for a politically viable regulatory improvement mechanism that can inspire confidence across our partisan and ideological divides. And it would create a court of appeal where anyone—business, consumers, labor, civic groups—could challenge existing rules and propose changes.

[gview file=”https://www.progressivepolicy.org/wp-content/uploads/2019/03/PPI_Break-Americas-Regulatory-Log-jam_V4-1.pdf” title=”PPI_Break America’s Regulatory Log-jam_V4 (1)”]

 

ENDNOTES

1) Michael Mandel, “A Progressive Approach to Regulation”, Progressive Policy Institute, February 2011: https://www.progressivepolicy.org/2011/02/reviving-jobsand-innovation-a-progressive-approach-to-improving-regulation/

2) Federal Register: The Daily Journal of the United States Government, “Federal Register and CFR Publication Statistics – Aggregated Charts (XLS)”: https://www.federalregister.gov/reader-aids/understanding-the-federal-register/federal-register-statistics

3) Small Business Administration, “The Impact of Regulatory Costs on Small Firms,” September 2010: https://www.sba.gov/sites/default/files/The%20Impact%20of%20Regulatory%20Costs%20on%20Small%20Firms%20(Full).pdf.

4) “2017 NSBA Small Business Regulations Survey,” National Small Business Association, 2017. https://www.nsba.biz/wp-content/uploads/2017/01/Regulatory-Survey-2017.pdf

5) “Reducing Regulation and Controlling Regulatory Costs,” Executive Order 13771, Federal Register, January 30, 2017. https://www.federalregister.gov/documents/2017/02/03/2017-02451/reducing-regulation-and-controlling-regulatory-costs

6) Jennifer Erin Brown, Joelle Saad-Lessler and Diane Oakley, “Retirement in America: Out of Reach for Working Americans?” National Institute on Retirement Security, September 2018, https://www.nirsonline.org/wp-content/uploads/2018/09/FINAL-Report-.pdf.

7) Connor Raso, “How has Trump’s deregulatory order worked in practice?,” Brookings Institute, September 6, 2018. https://www.brookings.edu/research/how-has-trumps-deregulatory-order-worked-in-practice/.

Kim for Medium: “The Dangers of Big Ideas and Small Tent Politics for House Democrats”

Posted on by The Progressive Policy Institute

Emboldened by their conviction that the national zeitgeist is on their side, the progressive left is taking a harder line against House Democrats reluctant to embrace their agenda.

Groups like the Justice Democrats, for instance, have signaled their intent to primary moderate members who don’t espouse signature liberal efforts such as the “Green New Deal” or the abolition of private insurance in favor of single-payer health care. And last week, Rep. Alexandria Ocasio-Cortez reportedly warned her colleagues in a closed-door meeting of House Democrats that they could find themselves “on a list” of primary targets if they bucked the party on certain votes.

These tactics will do the party no favors as it works to maintain a relatively fragile majority. And as the findings of a pre-election poll by the Progressive Policy Institute (PPI) show, liberals are wrong to assume that most Americans share their desire for sweeping government intervention in the economy.

 

Read the full piece on Medium by clicking here.

Trump Gets It Half Right on PBMs

Posted on by The Progressive Policy Institute

In searching for ways to satisfy public demand for lower drug prices, President Trump has found rare common ground with Democrats. The White House recently released a plan to reform the way pharmacy benefit managers (PBMs) negotiate prices with drugmakers on behalf of health insurance companies. Specifically, the proposal takes aim at special discounts or rebates negotiated by PBMs that create a perverse incentive for drugmakers to push up the list price of their products.

The idea is to get rid of these incentives in order to bring down drug prices, which would mean lower out-of-pocket expenses for patients. Democrats like Senator Ron Wyden have long pushed for changes to the rebate structure. However, Trump’s plan has drawn fire from critics who say it could become a boon for big drug companies by shifting more costs to the federal government. The truth is, the rebate proposal is a good first step to help Medicare beneficiaries at the drug counter; but, without further action to increase transparency around drug pricing and encourage competition, costs could be shifted from drug companies to taxpayers.

 

New Ideas for a Do-Something Congress No. 5: Make Rural America’s Higher Education Deserts Bloom

Posted on by The Progressive Policy Institute

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.

 

THE CHALLENGE: HIGHER EDUCATION “DESERTS” ARE HANDICAPPING RURAL AMERICA

For millions of Americans, distance is as big or bigger a barrier to higher education access as finances. According to the Urban Institute, nearly one in five American adults—as many as 41 million people—lives twenty-five miles or more from the nearest college or university, or in areas where a single community college is the only source of broad-access public higher education within that distance. Three million of the Americans in these so-called “higher education deserts” also lack broadband internet, which means they are cut off from online education opportunities as well (1).

Rural students have lower rates of college-going and completion.

More than four in five people in higher education deserts – 82 percent – live in rural areas. This could be one reason why fewer rural Americans attend or finish college.

In 2016, 61 percent of rural public school seniors went on to college the following year, according to the National Student Clearinghouse, compared to 67 percent for suburban students (2). Only 20 percent of rural young adults between 25 and 34 have four-year degrees, says the USDA’s Economic Research Service, compared to 37 percent of young adults in urban areas (3). Moreover, the urban-rural gap in college degree attainment is growing. From 2000 to 2015, the share of college-educated adults rose by 7-points in urban locales compared to 4-points in rural areas.

Less-educated rural areas are falling behind while better educated cities leap ahead.

With more and more jobs demanding ever higher levels of skill, disparities in access to higher education are translating to vast disparities in the distribution of jobs and opportunity throughout the United States, including a widening urban-rural divide. Wealthy urban areas are getting richer, while rural areas are increasingly lagging.

The Economic Innovation Group (EIG), for instance, reports that of the 6.8 million net new jobs created between 2000 and 2015, 6.5 million were created in the top 20 percent of zip codes, which were predominantly urban (4). These prosperous, job-creating zip codes are also the best-educated. EIG further finds that 43 percent of residents in the top 10 percent of zip codes has a bachelor’s degree or better, compared to just 11 percent in the bottom 10 percent. While a four-year degree is of course not a prerequisite for a good living, the heavy concentration of highly-educated workers is indicative of the imbalance in economic opportunities between rural and urban areas.

Most of the nation’s least educated and most impoverished counties are rural. 

If education and prosperity are linked, so conversely are poverty and the lack of educational attainment.

Out of 467 U.S. counties identified by the USDA as “low education” counties – places where 20 percent or more of the population has less than a high school diploma – 79 percent are rural (5). These counties tend to be clustered in the rural South, Appalachia, along the Texas border and in Native American reservations and also suffer from higher rates of poverty, child poverty and unemployment.

 

THE GOAL: ERADICATE HIGHER EDUCATION DESERTS AND ENSURE EVERY RURAL AMERICAN HAS HIGHER EDUCATION ACCESS

Better access to higher education in rural areas, especially for the many millions of “nontraditional” students who are now increasingly the norm (6), can help close the gulf in opportunity between urban and rural areas. Greater opportunities for convenient, affordable higher education would allow more rural Americans to finish their degrees or pursue occupational credentials, qualifying them for higher-skilled, better-paid jobs. Rural students would also benefit by not being forced to leave home for school – not only lowering costs for students but potentially slowing or even reversing the population declines plaguing rural areas. Institutions of higher education can also serve as engines of economic development in the communities they serve. They can work with businesses to turn out the skilled talent they need and provide research or other support.

 

THE PLAN: CREATE RURAL HIGHER EDUCATION INNOVATION GRANTS TO ENCOURAGE NEW MODELS OF HIGHER EDUCATION REACHING RURAL AMERICA

While it’s unrealistic to establish a new college, community college or university in every rural area that needs one, emerging models for delivering higher education potentially offer a creative, cost-effective and effective alternative. These new models can also expand the ability of workers to obtain high-quality occupational credentials, which in many instances are likely to be more practical, affordable and desirable than pursuing a two-year or four-year degree.

Some states, such as Pennsylvania, Virginia and Maryland, are pioneering new approaches, such as “higher education centers” and virtual colleges, that use technology to broaden students’ options for both traditional college education and occupational training (7). The Northern Pennsylvania Regional College, for instance, operates six different “hubs” scattered throughout the 7,000 square miles it serves, plus numerous “classrooms” using borrowed space from local high schools, public libraries and other community buildings. In addition to conferring its own degrees, it provides the infrastructure for other accredited institutions to extend their reach through “blended” offerings combining virtual and in-person teaching.

Similarly, Virginia’s five higher education centers provide physical infrastructure for colleges and community colleges offering classes as well as occupational training in fields such as welding, mechatronics and IT certification. In Maryland, the Southern Maryland Higher Education Center offers specific courses from ten different institutions, including Johns Hopkins and the University of Maryland. Though relatively new, these institutions are already establishing a track record of success. In South Boston, Virginia, for instance, the Southern Virginia Higher Education Center worked with more than 30 area industries and entrepreneurs in 2017, developed customized training for nearly 150 workers in local companies and placed 173 students into new jobs (8).

Congress should encourage all states to make rural higher education a priority and help more states experiment with new models for accessing higher education in remote areas. One way to do this is to provide seed money in the form of Rural Higher Education Innovation Grants so that states can stand up pilots, evaluate the effectiveness of new models and scale up promising approaches. These grants moreover do not need to be large – the Pennsylvania legislature initially appropriated just $1.2 million to launch what is now NPRC.

As a start, Congress should set aside $10 million in competitive grant funding for states. Funding for these grants could come from an earmark of the money collected from the 1.4 percent excise tax on large university endowments included in the 2017 tax legislation (9).

 

Read Here: New Ideas For a Do Something Congress No. 5

Valentine for BlackPressUSA, “Developing a universal enrollment system for all Memphis public schools”

Posted on by The Progressive Policy Institute

On any given day, you can find Sarah Carpenter organizing parents in the Memphis area. A single mother of four daughters and 13 grandchildren, Carpenter was an advocate long before becoming co-founder and CEO of The Memphis Lift, which she describes as “a parent organization run by parents, for parents.”

Born and raised in North Memphis, Carpenter says her experience as a single parent prepared her to lead The Memphis Lift. “I have always been an advocate for my daughters and for other’s kids,” she says. “I started in 1995 when I was asked to help open a Family Resource Center in a high school and students without involved parents in their lives took to me. Parents would stop me and say, ‘They are passing my son on to High School and he can’t even read.”

Carpenter and her fellow co-founders met during the training component of a public advocate fellowship funded by the Memphis Education Fund, which educated parents about the landscape in Shelby County Schools (SCS). At the time, SCS had the highest number of “priority schools” –those in which student scores on state exams ranked in the bottom five percent – in Tennessee.

Carpenter and her colleagues have since visited more than 10,000 homes to educate others on the state of Memphis’s schools. SCS students can attend four categories of schools: traditional neighborhood schools, charter schools, charter schools in the state-run Achievement Schools District, and schools in the district’s Innovation Zone.

For Carpenter and her organization, ensuring that all parents – regardless of income – have access to all the options SCS has to offer is paramount.

Continue reading at BlackPressUSA. 

Marshall for Medium: “Will the Senate Defend Our Constitution?”

Posted on by The Progressive Policy Institute

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.’

 

Read the full piece on Medium by clicking here.

Escaping the Startup Trap: Can Policymakers Help Small Companies Grow to Major Employers?

Posted on by The Progressive Policy Institute

Starting a new business is hard. Scaling it up to a significant size is harder. Europeans have long fretted about their lack of ‘unicorns’— privately held startups with a valuation of more than $1 billion. More generally, there is a sense that European startups either fail to grow or are bought out by larger companies before they go public or create a significant number of new jobs.

A January 2019 analysis by CB Insights showed only 33 European unicorn companies, compared to 83 in China and 150 in the United States. For example, SoundCloud, an online audio platform, was founded in 2007 in Stockholm and later moved to Berlin. By 2016, it was valued around $700 million, and at one point sought a $1 billion valuation to be sold. However, by 2017, the company was on the verge of bankruptcy, abruptly fired 40 percent of its staff, and closed two offices. By August 2017, the company was valued at just $150 million. Or consider restaurant delivery firm Take Eat Easy, founded in Brussels in 2012. After a year, the company expanded to Paris and raised two rounds of venture capital funding in 2015. Take Eat Easy scaled from 10 to 160 employees and from 2 to 20 cities. But in 2016 Take Eat Easy shut down, citing revenue not yet covering fixed costs and an inability to raise a third round of funding.

Even in the relatively successful United States, it seems that new companies are scaling up less frequently than they used to. The Progressive Policy Institute analyzed Census Bureau data on business dynamics over time, focusing on “young” businesses—aged 6-10 years after being founded. We found that in 2014, 0.05% of young businesses were major employers, defined as having 1,000 or more workers. That’s half the 1994 rate when 0.1% of young businesses were major employers.

 

Telehealth and vision tests in Washington State

Posted on by The Progressive Policy Institute

Washington has long been a leader in both innovation and health care. Telehealth, which lays at the intersection of the two, is an innovative, cost-effective way to deliver health care to underserved populations. Seeing the value of telehealth, Washington State requires health insurance companies, Medicaid managed care plans, and health plans offered to Washington State employees to reimburse health care providers who provide health care services via telehealth technology.

The rules apply to both real-time transmitted appointments and to “store-and-forward” services which involve information, including images, data and labs, reviewed at a later time – though reimbursement for those services must be explicitly outlined in provider agreements. Telehealth shows particular promise at reducing the costs and hassle associated with renewing contact lens prescriptions.

 



			


	

			




			
				


	

		
A Radically Pragmatic Idea for the 116th Congress: Take Yes for an Answer on Net Neutrality

				

			Posted on  by The Progressive Policy Institute		

			


	

		
Net neutrality is the basic idea that all internet traffic must be treated equally on the network and no company should be able to block or throttle online traffic in order to gain a competitive leg-up. This is a pro-competitive, prophylactic policy to ensure internet providers don’t unfairly become gatekeepers for online services. It’s a sound bi-partisan pragmatic public policy agreement.


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. Even today, the FCC’s most recent “Restoring Internet Freedom” order and local net neutrality rules in California and Vermont remain mired in court while Congress considers several different legislative approaches – none of which have been able to gain majority support.


This chaotic and uncertain approach drags down our economy, undermines investment needed to connect new communities and close the digital divide, and sucks up all the oxygen in the room so that other issues like increasing rural connectivity and reducing the digital divide, protecting elections from foreign interference, and finding ways to bring new competition to digital markets get crowded out. Economists estimate that the overhang of this debate drives away nearly $35 billion a year in network investment and consumer upgrades.










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.










			


	

			




			
				


	

		
PPI Launches Series of New Ideas for a ‘Do-Something’ Congress

				

			Posted on  by The Progressive Policy Institute		

			


	

		
Dear Democratic Class of 2018,


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




New Ideas for a Do-Something Congress No. 1: “A Check on Trump’s Reckless Tariffs”


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.




A Radically Pragmatic Idea for the 116th Congress: Take “Yes” for an Answer on Net Neutrality




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.




New Ideas for a Do-Something Congress No. 2: “Jumpstart a New Generation of Manufacturing Entrepreneurs”


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.




New Ideas for a Do-Something Congress No. 3: “End The Federal Bias Against Career Education”


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.




New Ideas for a Do-Something Congress No. 4: “Expand Access to Telehealth Services in Medicare”


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.




New Ideas for a Do-Something Congress No. 5: Make Rural America’s “Higher Education Deserts” Bloom


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.




New Ideas for a Do-Something Congress No. 6: Break America’s Regulatory Log-jam


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.




New Ideas for a Do-Something Congress No. 7: Winning the Global Race on Electric Cars


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.




New Ideas for a Do-Something Congress No. 8: Enable More Workers to Become Owners through Employee Stock Ownership


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.


 




New Ideas for a Do-Something Congress No. 9: Reserve corporate tax cuts for the companies that deserve it


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.


			


	

			




			
				


	

		
PPI Survey: Voters Back National Privacy Law

				

			Posted on  by The Progressive Policy Institute		

			


	

		
Chinese hackers stealing technology from U.S. companies, Russian trolls interfering in our elections, U.S. tech leaders hauled before Congress to explain some new data breach or misuse of personal information – hardly a week goes by without Americans being bombarded with new revelations about assaults on our privacy.


The problem will only get worse as America’s physical industries – autos, construction and manufacturing of all kinds – go online. That will trigger explosive growth in the volume of personal information companies collect – and try to sell.


And while the United States leads the world when it comes to digital technology and data-driven commerce, we lag in updating our cybersecurity and privacy laws. Unlike Europe, which is implementing its General Data Protection Regulation (GDPR), Washington has no national standard for privacy.


States are moving to fill this policy vacuum. Following Nebraska and Alabama, California recently passed a law giving consumers the rights to know what information a business has collected about them, to “opt out” of a business selling their data, and to have their data deleted. That’s understandable, given growing public demands for data security, but a state-by-state approach to privacy makes little sense.


It would balkanize the seamless digital marketplace that has been key to America’s high-tech leadership, forcing consumers and businesses to run a bewildering gauntlet of varying standards, rules and enforcement regimes. Instead, we need a national privacy law that’s simple but strong, with one common standard and one set of rules that every company must follow and every consumer can understand.


U.S. voters need little convincing. A recent Expedition Strategies poll for PPI found that voters are very concerned about abuses of their personal information. 60 percent said they are worried about tech companies’ handling of privacy and data protection. It’s no wonder a solid majority (58 percent) backs national legislation enshrining consumers’ private rights, as shown in Figure 1.




PPI believes the new Democratic House majority should make a national privacy law a top priority for the next Congress convening in January. Since California’s new rules take effect in 2020, Congress should pass a national law by the end of the year.


Can a Democratic House and Republican Senate find common ground next year on a national privacy bill? The good news is that privacy is not intrinsically a partisan issue. It could provide an early test of Republicans’ willingness to work with Democrats to break the spell of tribal partisan warfare that hangs over Washington, and get our national government back in the business of solving national problems.


			


	

			




			
				


	

		
America’s Resilient Center and the Road to 2020 – Results from a New National Survey

				

			Posted on  by The Progressive Policy Institute		

			


	

		
The Progressive Policy Institute (PPI) today released a national opinion survey that highlights the surprising resilience of America’s pragmatic political center two years into Donald Trump’s deeply polarizing presidency. The poll reinforces a key takeaway from the 2018 midterm elections: Suburban voters – especially women – are repelled by the president’s racial and cultural demagoguery and are moving away from a Trump-dominated GOP.


“Our poll suggests that Donald Trump’s election in 2016 is more likely to be an aberration than any permanent shift in America’s political course,” said Anne Kim, PPI Director of Social and Domestic Policy and PPI President Will Marshall. “The defection of suburban voters creates a political landscape that favors Democrats in 2020 – if they stick to the ‘big tent’ approach that proved so effective in the midterm.”


The poll conducted by Pete Brodnitz at Expedition Strategies contains findings about what’s top of mind for voters, their ideological outlook and leanings, and their views on health care, trade, growth and inequality, the role of government, monopoly and competition, and other contentious issues.


“The agenda that could help Democrats sustain a governing majority, our poll suggests, is one that is progressive yet pragmatic—one that’s optimistic, aspirational and respects Americans’ beliefs in individual initiative and self-determination; one that broadens Americans’ opportunities for success in the private sector and strengthens the nation’s global economic role; one that demands more from business but doesn’t cross the line into stifling growth; and one that adopts a practical approach to big challenges such as immigration reform and climate change,” write Kim and Marshall.


“For Democrats to maintain and expand this near-majority advantage, they must craft a broadly appealing agenda that brings or keeps independents and less committed partisans—the majority of whom call themselves ‘moderate’—under the tent.”


PPI-Expedition-Strategies-2018-Poll-PPT


PPI_Americans-and-The-Economy2018


			


	

			




			
				


	

		
Going Local: Progressive Federalism in the 21st Century

				

			Posted on  by The Progressive Policy Institute		

			


	

		
Federalism – the division of sovereign authority among three separate levels of government (local, state and national) – is a distinctive feature of American democracy. The interplay between the three levels has profoundly shaped our country’s political, economic and social development.


During the 19th Century, progressive democrats like Jefferson and Jackson regarded the states as bulwarks of individual liberty, free enterprise and popular sovereignty. They resisted conservative attempts to establish a European-style central government, which they feared would be dominated by economic privilege.


Around the turn of the 20th century, however, the party they founded reversed course. Democrats increasingly saw centralizing political power in Washington as essential to tempering the social disruptions of industrialization, countering the growing economic power of corporations, and defending America in a dangerous world.


Now, in the 21st century, many progressives are questioning whether aggregating more power and resources in Washington is still the best way to achieve their ends. A key reason is that, with the federal government stalemated by extreme polarization, fiscal deadlock and bureaucratic bloat, the political initiative in America is increasingly shifting to other levels of government, especially to local and metro leaders.


Progressives and National Power 


During the 20th Century, U.S. progressives helped to catalyze three great waves of political centralization:


The Progressive Era – As the century dawned, reformers in both parties warned that powerful new forces – industrialization, urbanization and the concentration of economic power in giant monopolies – were overwhelming the capacities of state governments. Woodrow Wilson orchestrated a remarkable flurry of progressive legislation that included the federal income tax, the Federal Reserve System, national child labor laws and tougher anti-trust regulations. Progressives also pushed successfully to increase popular participation in government, through primaries, referenda and initiatives, and direct election of U.S. Senators.


The New Deal – During the Depression, FDR promised “bold, persistent experimentation” to deal with the nation’s worst economic calamity. His New Deal expanded the scope of federal power dramatically, by launching huge public works and relief programs; regulating prices and wages; nationalizing income support and labor protections; establishing Social Security; and, multiplying federal agencies staffed by a new breed of college-educated technocrats. Washington also replaced laissez faire with Keynesian spending designed to manage the business cycle.


The Great Society – The nationalizing impulse intensified after World War II, reaching its peak in LBJ’s Great Society. This period of expansive liberalism saw the federal government assume responsibility for problems that had previously been left mainly to states and local authorities: racial injustice, poverty, illness, gender inequality, urban decay, educational inequity and pollution. Proliferating mandates and regulations vastly extended Washington’s reach and often made state and local governments seem like subsidiary arms of the federal government.


The assumption that underlay each of these waves – that nationalizing policy would best serve progressive purposes – was very often true. No one wants to go back to a time when giant monopolies crushed competition and bought state legislatures; when the doctrine of “states’ rights” sanctioned racial subordination; or when industries produced unsafe food and polluted our air and water with impunity.


But we live in a different world. Power today flows out of Washington. Urban America – centers of economic and social dysfunction a generation ago – has now become the nation’s prime catalyst for innovation. Brookings Institution scholars Bruce Katz and Jenifer Bradley have aptly dubbed this upsurge of local initiative and creativity the “metro revolution.” This phenomenon illustrates one of the great advantages of America’s flexible federalism: If one level of government stops working, the locus of public problem-solving shifts elsewhere.


The Progressive Policy Institute (PPI) believes it is time to rethink the default assumption of progressive federalism as we’ve know it – that the arrow of progress always points toward centralizing power. Here are five reasons to think the arrow now points the other way:


First and most obvious is the political impasse in Washington. The inability of our national leaders to forge consensus or compromise, especially on the biggest challenges facing the country, has given rise to a new truism: the more dogmatic and polarized our politics, the less productive our government. That’s why political leaders who want to get things done are increasingly drawn to local government instead of Washington, where lawmakers are turning into fundraisers.


Second is the cratering of public confidence in the federal government. Most Americans don’t trust Washington to do the right thing most of the time. This lack of confidence in the means by which progressives propose to solve the nation’s problems and help people get ahead is a huge obstacle. In contrast, 72% of Americans trust their local governments, making them more promising terrain for public activism.


Third, the federal government has lost its fiscal freedom. Today the cost of maintaining the government’s cumulative commitments exceeds expected tax revenues. With “mandatory” spending on entitlements relentlessly squeezing out space for new investments, U.S. officials in effect have slapped fiscal handcuffs on themselves. That squeeze will only intensify as America gets older. Says Emmanuel, “We’ve always said there’d be a day when all the federal government does is debt service, entitlements and defense. Well folks, that day is here.”


Fourth, after four generations of nationalizing policy, Washington really has gotten too big, too bureaucratic and too rule-bound. The federal government is mired in the sludge of duplicative, overlapping and outdated laws and regulations that have accumulated over decades. Saddled with industrial-era bureaucracies and colonized by powerful interest groups, the vast federal establishment today is better at protecting the programmatic status quo than at sparking progressive change.


Fifth, digital technology, networks and globalization have combined to attenuate Washington’s ability to manage the national economy so that it delivers mass prosperity. Even as they create an increasingly integrated global economy, these forces also seem to be driving political fragmentation around the world. The great sociologist Daniel Bell captured this dynamic nearly three decades ago:


The common problem, I believe, is this: the nation-state is becoming too small for the big problems of life, and too big for the small problems of life. It is too small for the big problems because there are no effective international mechanisms to deal with such things as capital flows, commodity imbalances, the loss of jobs, and the several demographic tidal waves that will be developing in the next twenty years. It is too big for the small problems because the flow of power to a national political center means that the center becomes increasingly unresponsive to the variety and diversity of local needs. 


         In short, there is a mismatch of scale.


Today’s borderless economy is organized around vibrant metro regions, not nation-states. U.S. metros today are making the key investments – in innovation, modern infrastructure and human capital – that are renewing our economy’s dynamism and ability to provide broadly shared prosperity. They are developing their unique assets and comparative advantages to find niches in the emerging global knowledge economy. What they need from Washington is not standardized, one-size-fits all policies that are oblivious to local realities, but the flexibility and resources to tackle the nation’s problems from the ground up.


For all these reasons, it’s time to redefine federalism for the 21st century. Instead of turning reflexively to Washington, progressives should push for a systematic decentralization of decisions and resources to the creative Mayors and metro leaders who are making local government an effective agent of economic and social progress.


This isn’t a matter of eviscerating the federal government, as many conservatives would like. Washington must continue to do the things it is best suited to do: set fiscal and monetary policy; invest in science and technology, infrastructure and career preparation; make the rules for immigration, environmental protection and other cross-border issues, and of course take the lead on diplomacy and defense.


Nor does progressive federalism mean a preference for states over Washington – in fact, metro leaders say state governments often put bigger obstacles in their way than the feds. The real question is, how can the states and the federal government enable and be better partners with local leaders? What practical steps should they take to empower metro leaders to do more of what they are already doing – spurring job and business creation; forging regional collaborations and public-private partnerships; unlocking private and civic investment in local infrastructure and housing; improving education and career training; making their communities healthier and safer; and, making local governments more efficient and responsive to the people they serve?


			


	

			




			
				


	

		
Goldberg for RealClearPolicy, “The Supreme Court’s Next Climate Change Case?”

				

			Posted on  by The Progressive Policy Institute		

			


	

		
The U.S. Supreme Court is about to get a look at the latest attempt by environmentalists and their political allies to bypass legislatures and use the courts to enact their climate-change agenda. So far, they have sued America’s energy producers in hopes of having judges, not regulators, set carbon emission limits and making energy producers pay for local infrastructure projects to deal with the impacts of climate change. As the Progressive Policy Institute has explained, selling fossil fuels is not illegal, and sensible people on both sides of the aisle have long agreed that these actions have no foundation in the law.


Indeed, this litigation has already percolated up to the U.S. Supreme Court once. In a unanimous ruling authored by Justice Ruth Bader Ginsburg, the Court made it clear that Congress and the EPA, not the courts, are the appropriate branches of government to regulate greenhouse gas emissions. Justice Ginsburg understood, as have other progressive legal scholars, that suing energy producers over climate change is not the proper way to set American energy policy, which must balance many factors including environmental concerns, energy independence, and affordability.


Continue reading at RealClearPolicy. 


			


	

			




			
				


	

		
Litan for the Hill, “Talk of breaking up ‘Big Tech’ is misguided, premature”

				

			Posted on  by The Progressive Policy Institute		

			


	

		
How fast the tables have turned. Only a few years ago, the major technology platform companies — Alphabet (Google), Amazon, Apple and Facebook — were widely admired.


Now, they are in the dock, accused of limiting competition; chilling startups and the innovation they bring; widening income and wealth inequality; threatening our privacy; enabling foreign actors to poison our elections; and engaging in political bias.


Some urge the government to break up the tech platforms. Others want to regulate them as public utilities. In my new e-book, “A Scalpel, Not an Axe,” recently published by the Progressive Policy Institute (PPI), I effectively say, “Hold on.”


The antitrust laws, as long interpreted by the courts, do not punish companies for successes achieved through innovation and luck, or from benefiting from economies of scale and networks that become more valuable with more users.


There is no credible evidence that any of the tech platforms has engaged in unlawful monopolization that warrants their breakup, such as AT&T’s refusal to interconnect long-distance rivals with its local phone companies (which led to its breakup in the 1980s) or Microsoft’s restrictive practices that entrenched the dominance of its Window’s operating system (which was not punished by breakup).


U.S. proponents of breaking up Google are closely watching the European Commission’s anti-Google actions and are urging U.S. regulators to take a similarly aggressive line. Despite its regulatory zeal, however, the EU is not calling for breaking up Google.


Instead, Google changed its algorithm to ensure it wasn’t favoring its price comparison engine over others. And even if American courts were to rule against Google’s tying of it apps to its Android mobile operating system, they could simply order the company to stop.


Do these big companies freeze out startups, creating what The Economist has called a “kill zone” around their markets?


Continue reading at The Hill.


			


	

			




			
				


	

		
New PPI E-Book: Don’t Break Up Big Tech, Update Data Laws

				

			Posted on  by The Progressive Policy Institute		

			


	

		
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.


# # #