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An ACA Subsidy Smoking Gun?

Robert VerBruggen - July 25, 2014

Up until this point -- see here and here -- I've said two things about the Obamacare text at issue in the subsidy cases: The formula quite clearly states that the subsidies are calculated based on the premiums charged in an "Exchange established by the State," but it's unclear whether this was an intentional restriction (designed to withhold subsidies from states that don't set up exchanges) or just a mistake. Under precedent, if the text doesn't make Congress's intent clear, courts can investigate the law's history to determine what Congress meant or defer to the bureaucracy's interpretation.

Well, now we have good evidence that the law's architects -- or, as Incidental Economist blogger Bill Gardner pointed out to me on Twitter this morning, at least some of the law's architects -- in fact intended to withhold subsidies. Via a commenter at the Volokh Conspiracy, the Competitive Enterprise Institute's Ryan Radia (who's contributed to RealClearPolicy) stumbled upon this 2012 video of an address by Jonathan Gruber, one of the law's driving forces:

At 31:25, Gruber says:

What's important to remember politically about this is if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits-but your citizens still pay the taxes that support this bill. So you're essentially saying [to] your citizens you're going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.

Again, this doesn't necessarily mean that all of the law's architects understood the text this way, and if different drafters thought the text meant different things, courts could simply defer to the administration's interpretation. The drafters who've come forward all swear that they meant the subsidies to be available everywhere -- and the law is so poorly written that a wide variety of readings are possible. For example, as discussed in the D.C. Circuit ruling and dissent, you could read the text to mean that federal exchanges can't have customers at all, because people in states without exchanges are not considered "qualified individuals" and the law quite arguably only authorizes exchanges to serve qualified individuals.

But at the very least, this statement ought to lay to rest the notion, popular among some on the left, that this setup is so far-fetched and ridiculous that Congress couldn't possibly have intended it. My favorite example here is from Ezra Klein, who used an analogy to federal highway funding to demonstrate how crazy it would be to create a program and then deny access to states that don't cooperate. The federal government hasn't followed his analogy exactly -- it hasn't built highways and then refused to let anyone drive on them -- but it has in fact, in a textbook example of "if you don't like the strings, don't take the money" federal policymaking, used highway funds to force compliance on state alcohol laws, just as some say Congress planned to use ACA subsidies to force states to create exchanges. 

This video might not make the ultimate outcome of these lawsuits easier to predict. But it certainly will make the debate in the months ahead a lot more interesting.

[Update: Peter Suderman found a TV appearance from this week in which Gruber claimed it was "unambiguous that (the wording of the law) was a typo." John Sexton found another speech in which Gruber made similar comments. In an interview with Jonathan Cohn, Gruber explained:

I honestly don't remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it. ...

At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn't ready by 2014, and states hadn't set up their own exchange, there was a risk that citizens couldn't get the tax credits right away. ...

But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn't take that step. That's clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o-you know, like a typo.

There are few people who worked as closely with Obama administration and Congress as I did, and at no point was it ever even implied that there'd be differential tax credits based on whether the states set up their own exchange. And that was the basis of all the modeling I did, and that was the basis of any sensible analysis of this law that's been done by any expert, left and right.

I didn't assume every state would set up its own exchanges but I assumed that subsidies would be available in every state. It was never contemplated by anybody who modeled or worked on this law that availability of subsides would be conditional of who ran the exchanges.


Robert VerBruggen is editor of RealClearPolicy. Twitter: RAVerBruggen

Immigration: Stopping the Surge

Michael Cipriano - July 25, 2014

As President Obama and Congress deliberate how to address the surge of unaccompanied minors at the nation’s southern border, David Inserra, a research associate at the Heritage Foundation, scolds the government for its lack of enforcement of immigration laws.

We took a few minutes to speak with Inserra. The conversation has been edited lightly for clarity.

What is the William Wilberforce Trafficking Victims Protection Reauthorization Act, and how has it contributed to the ongoing immigration surge?

The William Wilberforce Trafficking Victims Protection Reauthorization Act was a bill that was passed in 2008. It added a provision to the law that set up a different way of handling unaccompanied alien children from countries other than Mexico, non-contiguous countries. It meant that people who were from Central America or from the rest of South America, not including Mexico, had to be handled by the Department of Health and Human Services, not by the Department of Homeland Security.

The law contributed to making it more difficult to remove these individuals, because it provides that an alien child in the custody of HHS will placed in the "least restrictive setting" in the best interest of the child. About 90 percent of the time, that is the child's family, which can be located anywhere in the U.S. -- and this results in approximately 46 percent of unaccompanied alien children not showing up for their court date. They also have to go through the lengthy deportation process, which could take over a year.

What else is contributing to the surge? Don't we have laws that are supposed to deal with issues like these?

I would say there are two parts to that answer. First, there's the Deferred Action for Childhood Arrivals (DACA) memorandum and other uses of prosecutorial discretion, that is, President Obama's ability to say, "I am not going to enforce the law against certain groups." This is encouraging more individuals to come to the United States illegally. They don't necessarily understand the complexities of U.S. immigration law. They simply understand that people are being allowed to stay, certain illegal immigrants are not being deported, and that is acting as encouragement.

To the other part of your question -- whether we have ways of dealing with this -- I would certainly agree. In this paper, I note that there is a section of the Immigration and Nationality Act which does allow the president to remove any or all aliens that he comes across. It is in the sole, unreviewable discretion of the Department of Homeland Security. They simply don't want to use that authority. So even though there is this William Wilberforce Law that is clouding the issue, I believe he does have the authority to deal with this right now, but he simply does not want to do so.

Do you think Texas governor Rick Perry's decision to send the national guard to the border is a legitimate response to the crisis?

I do think that sending about 1,000 national guardsmen to support the Texas Department of Public Safety is an appropriate response as a short-term solution. Guardsmen are great at helping Border Patrol, providing logistics support, providing surveillance support. 

But they are not a good long-term fix. They are not as cost-effective as the Border Patrol, and they aren't fully trained to do all the things which a Border Patrol agent is trained to do. So right now, helping people get back to the front lines, that is helpful. But not as a long-term solution.

What long-term policies should be enacted to deal with the crisis. 

First of all, we should rescind DACA and other policies that the president has used to not enforce the law against certain people because they don't fit his "enforcement priorities." Enforcement priorities simply mean that some people aren't priorities and we aren't going to enforce the law against them. That is an additional magnet for people to come here illegally. Once they are in, they are pretty much good. 

Another thing we should be doing is to clarify the William Wilberforce law. That will help streamline the process and make it clear to the president that he does have the authority to remove these kids in an expedited matter. 

In the long term we need to talk about building partner capacity in Latin America. There is a push factor -- conditions encouraging immigrants to leave -- in Latin America, and we do need to make sure we are cooperating with those countries, providing security assistance down there to stop the crime and corruption that is going on.

Michael Cipriano is a RealClearPolitics editorial intern. 

Charles Ornstein, ProPublica - July 24, 2014

For months, journalists and politicians fixated on the number of people signing up for health insurance through the federal exchange created as part of the Affordable Care Act. It turned out that more than 5 million people signed up using by April 19, the end of the open-enrollment period.

But perhaps more surprising is that, according to federal data released Wednesday to ProPublica, there have been nearly 1 million transactions on the exchange since then. People are allowed to sign up and switch plans after certain life events, such as job changes, moves, the birth of a baby, marriages and divorces.

The volume of these transactions was a jolt even for those who have watched the rollout of the ACA most closely.

"That's higher than I would have expected," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "There are a lot of people who qualify for special enrollment, but my assumption has been that few of them would actually sign up."

The impact of the new numbers isn't clear because the Obama administration has not released details of how many consumers failed to pay their premiums and thus were dropped by their health plans. All told, between the federal exchange and 14 state exchanges, more than 8 million people signed up for coverage. A big question is whether new members will offset attrition.

ProPublica requested data on the number of daily enrollment transactions on the federal exchange last year under the Freedom of Information Act because the Obama administration had declined to release this information, a key barometer of the exchange's performance, to the public. The administration also has not put out any data on the exchange's activity since the open enrollment period ended.

The data shows so-called "834" transactions, which insurance companies and the government use to enroll new members, change a member's enrollment status, or disenroll members. The data covers the 36 states using the federal exchange, which include Texas, Florida, Illinois, Georgia and Michigan.

When rolled out last fall, insurance companies complained that the information in the 834s was replete with errors, creating a crisis at the back-end of the system.

Between April 20 and July 15, the federal government reported sending 960,000 "834" transactions to insurance companies (each report can cover more than one person in the same family). That includes 153,940 for the rest of April, 317,964 in May, 338,017 in June and 150,728 in the first 15 days of July. The daily rate has been fairly stable over this period.

It was not immediately clear how many of the records involved plan changes or cancellations and how many were for new enrollments.

An insurance industry official estimated that less than half of the transactions are new enrollments. The rest are changes: When an existing member makes a change to his or her policy, two 834s are created — one terminating the old plan and one opening the new one.

Charles Gaba, who runs the website that tracks enrollment numbers, estimates that between 6,000 and 7,000 people have signed up for coverage each day on the federal exchange after the official enrollment period ended. Gaba's predictions were remarkably accurate during the open enrollment period.

"That doesn't account for attrition. That doesn't mean that they paid," Gaba said. "That's been based on limited data from a half dozen of the smaller exchanges, extrapolated out nationally."

The federal data obtained by ProPublica confirm some other facts about the rollout of, which was hobbled initially by technical problems. The slowest day was Oct. 18, when no 834 transactions were sent. That was followed by Oct. 1, the day the website launched, when a grand total of six records were sent to insurers.

By contrast, the busiest day was March 31, the official end of open enrollment, when 202,626 "834" reports were sent to insurers. The entire last week in March was busy.

About 86 percent of those who signed up for coverage on the federal exchange were eligible to receive government subsidies to help lower their monthly premiums. Those subsidies are being challenged by lawsuits in federal court contending they aren't allowed by the Affordable Care Act.

Two federal appeals courts came to conflicting decisions Tuesday on the permissibility of the subsidies (one said yes; the other no). They will remain in effect as the cases proceed in the courts, the Obama administration said.

The next time that the general public can sign up for coverage through the exchanges is from November 15 to February 15, 2015.

This piece originally appeared at ProPublica, where Charles Ornstein is a reporter, and was co-published with NPR's Shots blogClick here to download the data (Excel or CSV) released to ProPublica under the Freedom of Information Act. Read ProPublica's previous coverage of the Affordable Care Act and share your story.

Obamacare Suffers a Blow

Robert VerBruggen - July 22, 2014

The D.C. Circuit Court of Appeals has ruled 2-1 that the law's subsidies cannot legally be given out through the federal exchanges, as opposed to the state-run exchanges.

As I explained last week, Obamacare gives a formula for calculating premium subsidies, and that formula relies on the prices of plans available through "an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act." About three dozen states are using the federal exchanges instead of creating their own -- and it's section 1321, not 1311, that authorizes the federal government to step in when a state fails to set up an exchange. A literal reading of the law, therefore, suggests that subsidies are not legally available in much of the country.

However, as I also explained, precedent gives courts an "out" when an administration wants to interpret a statute broadly -- courts can decide that the law doesn't make Congress's intent sufficiently clear, and then turn to other clues to determine that intent. So this case partly hinges on the question of whether Congress wanted to deny subsidies in states that failed to set up exchanges. This is a much trickier issue -- it's plausible that Congress would have done this to create an incentive for the states to set up exchanges, but the law's architects deny that this was their intention and there's little direct evidence either way. (See the previous post for more details.)

At any rate, the D.C. appeals court reached the obvious conclusion regarding the text -- "a federal Exchange is not an 'Exchange established by the State'" -- despite finding that 1321 exchanges could otherwise be treated as 1311 exchanges. (This argument stems from the fact that section 1321 says the federal government may set up "such Exchange," referring to the exchange otherwise set up under section 1311. As the dissent notes, though, this is a hard case to make while maintaining that federal exchanges are not "established by the State," considering that section 1311 specifically defines an exchange as something established by a state.)

The court then responded to a variety of arguments that go beyond the text. For example, the court emphasized that legislative history must play a secondary role to the text itself, and noted that the evidence on this particular provision is scant. It also noted (as I did in my previous post) evidence that Congress at least considered the idea of intentionally limiting the availability of subsidies.

What happens next? Well, the government is sure to keep fighting, and another appeals court upheld the subsidies today, creating a circuit split. It seems likely that the Supreme Court will end up stepping in eventually (you can see the gory details of the process here). And over the past week or so we've run several pieces in our morning updates explaining what will happen policywise if federal subsidies are shut down.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Robert VerBruggen - July 21, 2014

Over at The New Republic, Alec MacGillis alleges that America's gun laws are helping to fuel the border crisis: Central American gangs buy guns here through straw purchasers, and then smuggle the weapons back home. He notes the stiff opposition the Bureau of Alcohol, Tobacco, Firearms, and Explosives encountered when it required gun stores in the four states along the Mexican border to report purchases of two or more long guns, as well as the political difficulty one would have trying to expand the rule nationwide.

He has a point. There is a gun-running problem, and the multiple-sale requirement is encountering more resistance than it probably should. But are guns from the U.S. really to blame, to any significant degree, for Central American violence? I have some issues with the way MacGillis goes about arguing they are:

According to data collected by the ATF, nearly half of the guns seized from criminals in El Salvador and submitted for tracing in the ATF's online system last year originated in the U.S., versus 38 and 24 percent in Honduras and Guatemala, respectively. Many of those guns were imported through legal channels, either to government or law enforcement agencies in the three countries or to firearms dealers there. But a not-insignificant number of the U.S.-sourced guns -- more than 20 percent in both Guatemala and Honduras -- were traced to retail sales in the U.S. That is, they were sold by U.S. gun dealers and then transported south, typically hidden in vehicles headed across Mexico, though sometimes also stowed in checked airline luggage, air cargo, or even boat shipments. (Similar ratios were found in traces the ATF conducted in 2009 of 6,000 seized guns stored in a Guatemalan military bunker -- 40 percent of the guns came from the United States, and slightly less than half of those were found to have been legally imported, leaving hundreds that were apparently trafficked.)

To MacGillis's credit, he does a much better job of using the ATF data than most journalists do -- he notes that these are not percentages of all crime guns recovered in each country, but merely percentages of guns seized and submitted to the U.S. for tracing. Unfortunately, though, this concession undermines the rest of his analysis. The ATF itself cautions that the data MacGillis uses do not constitute a "random sample"; guns are more likely to be submitted to the U.S. if foreign law-enforcement agencies have a reason to believe they actually came from the U.S.

Variations in the percentage of these guns that really did come from the U.S., therefore, don't mean much -- most likely, they just show that some countries are more thorough in sending trace requests and/or less skilled when it comes to guessing whether a gun is American. Neither do variations in the percentage of U.S.-sourced guns that came from retail stores -- this number will be affected not only by the flow of trafficked guns (the numerator) but also by the flow of legally traded guns (which makes up the rest of the denominator). The only number MacGillis provides that's useful is the one from the Guatemalan military bunker: It's a single collection of guns, so the stat may not be generalizable, but at least the denominator is a collection of illegal guns found naturally.

There are some other ways to analyze the ATF's trace data, however. First of all, we might want to get a better sense of the raw numbers. These confirm another contention MacGillis makes, which is that Mexico has a far bigger problem with American guns than Central America does (he cites both proximity and Mexico's more restrictive domestic gun laws). The biggest Central American source of gun traces that led to U.S. retail stores in 2013, Guatemala, submitted 133 of them. All six countries combined had only 391. By contrast, in most years, more than 5,000 guns from Mexico are traced to retail purchases from the U.S.

We can also try dividing the number of guns traced to U.S. retail stores by other statistics -- here, I'll try each country's total population and its total number of intentional homicides. These calculations assume, of course, that trace data reflect the overall prevalence of trafficked guns in a country. In fact, it's likely that some countries are more likely than others not to bother submitting guns that were in fact trafficked -- or that some countries have better law enforcement and find a higher percentage of all trafficked guns -- and this will throw off the calculations. So, while I think this is a useful exercise, take the results with a grain of salt.

By looking at total population, we can get a sense of which countries have the biggest appetite for illegal U.S. guns on a per capita basis. Belize seems to be an outlier thanks to its small size (20 gun traces but a population of less than a third of a million):

It's also helpful to see how each country's U.S. gun problem stacks up to its overall homicide problem. Note that this is not the percentage of homicides resulting from guns trafficked from the U.S. -- not all traced guns were used in homicides, so that number might be lower than what you see here, and not all homicide guns are found or traced, so it might be higher too. It's just a way of comparing the two problems:

So, every year, Central America as a whole traces one gun to a U.S. retail store for every 100,000 people living there and every 50 intentional homicides that occur. No question, that's much higher than the ideal number, which is zero. But is it high enough to make U.S. gun laws a significant driver of Central American violence, especially considering the far higher numbers for Mexico (about one for every 25,000 population and almost one for every five homicides)? It's hard to say: We don't know how accurate of a portrait these numbers paint, and even if we had better data it would be hard to say how effective stricter gun laws would be at staunching the flow of guns, not to mention how big of a homicide reduction a reduced flow of American guns would bring. [Update: ... and not to mention how many refugees would stay home thanks to a reduction in homicides. There's some evidence the border crisis isn't mainly driven by violence. Hat tip to Greg Pollowitz at National Review.]

You can download a spreadsheet containing the data for this post here.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Jerry Brown Provides a Powerful Argument for California Separation

Ian Adams, R Street - July 18, 2014

Gov. Jerry Brown's spokesman has raised questions about the feasibility of the Six States proposal, arguing that "the proposal has serious practical challenges." But does this position harmonize with Brown's own articulated preferences?

Venture capitalist Tim Draper believes his initiative to carve California into six separate states has now received the requisite number of signatures necessary to qualify for a November 2016 ballot. If it does, since the vote itself is not imminent, voters in California will have a substantial amount of time to consider separation and subsidiarity.

Public reaction to the initiative has been mostly critical. A poll in February placed opposition to the Six States plan at 59 percent. Among pundits and the Internet crowd, there is even less enthusiasm. In rare spasms of political conservatism, Ezra Klein of Vox believes that it is "an incredibly dumb idea"; the San Francisco Chronicle maintains that such a move will create a "state of confusion"; and Reddit's response has been the comically apoplectic: "F*** everything about this." Perhaps the difficulty Vladimir Putin faces in reassembling the former Soviet Union is informing their opinions.

Nonetheless, the obstacles to the Six States effort truly are daunting. First, the initiative would necessitate a majority vote of California's electorate. Second, approval of the split by the California Legislature, as it is currently composed, would likely be required. Third, the plan would need a green light from Congress. Each step appears a degree of magnitude more difficult to achieve than the last.

Still, the Six States plan deserves serious consideration if for no other reason than the existing precedent for such a conversation.

While California is today the most populous state in the nation, with 38 million people currently living within its borders, extreme geographical and cultural variations have always been a hallmark of the state. In 1859, California's legislature recognized the problem associated with such dissimilarities and passed legislation that would have broken California into two states, Northern and Southern. When the question was put to voters, they agreed. Three out of four voters cast a ballot in favor of devolution (Congress never acted on the question, preoccupied as it was by the events leading to the Civil War).

Today, there are any number of angles from which to evaluate the Six States proposal, including representational, economic and cultural.

The subsidiarity angle, though, is well-known as a favorite of California's current governor, Jerry Brown. Gov. Brown is a former Jesuit novice fond of Catholic social philosophy. During both the 2013 and 2014 State of the State addresses he referenced the notion of "subsidiarity." The idea behind subsidiarity is that matters should be handled by the least centralized and smallest competent authority possible.

Through the lens of subsidiarity, California's government is something of a failure. Can it really be said that 38 million Californians are represented in Sacramento by the smallest competent authority possible? Consider that a California state senator represents 931,000 people, compared to a California member of Congress who represents 704,000 people. This ratio of population-to-legislator is by far the highest in the United States.

Perhaps the issue could be addressed by something short of dividing the state since adding legislators is not unheard of, but other problems defy straightforward resolution.

Not unexpectedly, even though the U.S. Constitution grants the states plenary power over matters not explicitly reserved to the federal government, the State of California maintains state functions that are unable to respond flexibly to regional concerns. This is particularly true with regard to the state's regulatory environment on business, natural resources and transportation issues.

For example, those areas of California that are dependent upon cultivation of agricultural development, and those that are dependent upon the use of natural resources, chafe under the political weight of parts of the state capable of supporting themselves through other means. By use of the governor's subsidiarity concept and dividing California, new states would be able to establish regulatory environments reflective of not only their own political will, but also the economic assets of their region. Doing so, residents of the new states would have their will better reflected by a state government in closer proximity to their concerns – a total win for subsidiarity.

Clearly, the practical uncertainty associated with splitting up California demands at least as much attention as the theoretical justifications for a split. No doubt, much time and effort will be expended in that very endeavor. Still, an advocate of free markets and the plain benefits of federalism would be hard-pressed to ignore the virtues of reassessing California's present situation.

Ian Adams is an attorney in Sacramento, Calif. and an associate policy analyst of the R Street Institute. This piece originally appeared on the R Street blog.

Education: Does Spending Equal Outcomes?

Michael Cipriano - July 18, 2014

When it comes to education, more spending does not always equal better results, says Robert Hanna, a senior policy analyst with the Center for American Progress, in a new paper. In fact, many "twin districts" -- districts that are similar in size, the proportion of students who are from low-income families, and the proportion of students who have limited English proficiency -- see similar achievement results despite different levels of spending and revenues.

Are there ways for districts to achieve a bigger bang for their educational buck? We recently took a few minutes to speak with Hanna about his analysis. The conversation has been edited for length and clarity.

It's difficult to compare schools with each other because there's so much that they don't control -- some schools have more poor students than others, and so on. Can you tell us about how your "twin districts" approach cuts through this?

We have data -- it is public data from the Department of Education -- that is a survey of district finance. So we know about district spending on instruction, or on operations, or on administration more broadly, and there are more specific breakdowns of those items. Some states have districts that break up in different ways, but generally speaking, 7,000 or more of these districts existed for the time period in our data set from 2009 to 2010.

What we wanted to do for this particular report was to try to compare districts that look very similar. Twin districts are in the same state, have the same size, and serve similar student populations in terms of students designated as English language learners, the number of students who would be eligible to receive free or reduced price lunches, etc. We were able to identify around 400 pairs of districts, so over 800 districts total. We really wanted to address in this paper what we can say about how these twin districts differ.

What were your main findings?

We were generally doing comparisons between higher-spending and lower-spending districts. What we see is that when you compare high- and low-spending districts, they don't really differ in their achievement results for math and reading/language arts.

So you have districts that serve similar student populations, and they spend different amounts of money and collect different levels of revenues, and yet they get the same achievement results, on average, in terms of our whole research sample. From this, you can infer that productivity differs between the districts broadly in these two kind of sample sets of the higher- vs. lower-spending districts.

On average, the higher-spending districts spent around $1,600 more per student, and they still got the same results. Same thing with the revenue: Districts within the same state are collecting different levels of local revenues -- most of which is derived from property taxes -- and generally speaking, we found that the state and the federal government don't fill this gap. Still, the twin districts were essentially achieving the same results on average.

The other thing we did in terms of rounding out the findings -- we wanted to dig slightly deeper -- we ended up calling a whole bunch of districts. We contacted over 100, but we ended up getting about 20 superintendents who were interested or willing to speak with us briefly on the phone. On this I got help from my coauthor, Bo Morris, so I acknowledge him here. One of us interviewed each of these superintendents.

We discussed productivity broadly, but it really kept coming back to the fact that, especially during the particular year 2009-2010, they had very little authority or flexibility to spend the resources they had. They were saying they agree that productivity matters, but they don't have that much flexibility, particularly at a time that was at the height of the recession when resources were much more limited. As we think of our productivity, we also want to think about the fact that district leaders believe they had very limited control at this time.

What does the report recommend to state education policymakers to increase productivity in schools?

One of our recommendations was to make sure that, on the one hand, state policymakers help districts understand the flexibilities that already exist in the streams of money that they get. On the other hand, we also want to make sure that policymakers grant additional flexibility so that districts can be more productive with the resources they have and get better outcomes.

We should also make sure districts are funded equitably, which speaks to our finding about the state revenue differences, because the state and federal government combined don't fill the funding gaps that arise because of local disparities. We point to California and their local-control funding formula, and we recommend that states follow this method of funding to ensure that the students with the most needs get the commensurate level of resources in order to be able to perform at a higher level.

Michael Cipriano is a RealClearPolitics editorial intern.

Rethinking the Social Contract

Christina Breitbeil - July 17, 2014

Expanding the safety net is consistent with American values, writes Eric Meslin, director of the Indiana University Center for Bioethics, in a new paper coauthored with Aaron Carroll, Peter Schwartz, and Sheila Kennedy.

Are conservatives wrong to see modern social programs -- most notably, the Affordable Care Act -- as a violation of America's foundational principles? We recently spoke with Meslin to learn more. The conversation has been edited for clarity.

What is the "social contract," and what political message does it convey?

The social contract is an implicit understanding between people and the society in which they live about how society should be organized, how benefits are distributed, and how shared responsibilities are defined for all citizens. The beauty of the social contract is that it conveys many messages, not a singular one. It conveys the message of shared decisionmaking, but equally it conveys a political message of accountability and responsibility.

So, for example, a very liberal interpretation of the social contract is one that Rousseau talked about, in which society organizes itself according to the expectations that people have for human flourishing. Alternatively, the old Hobbesian social contract conveyed a political message of limited rights and freedoms. So, both the beauty and the frustration of using social-contract speak is that it can convey political messages across the entire spectrum, from the most conservative to the most progressive.

In the paper you say, “too often, a meritorious proposal [for social reform] is defeated by attacks portraying it as a violation of individual rights or a deviation from the foundational principles of U.S. society.” Alternatively, how can expansion of the social safety net, by methods such as welfare programs and taxation, serve to complement the social contract by advancing American values?

I think there are underappreciated but accepted American values that people should not be left to suffer, that people should not be placed at a disadvantage through no fault of their own, and that, as a community of caring people, we should be outraged when the basic necessities aren't guaranteed. I think over the last 20 or 30 years, maybe even the last 40 years, there has been both an erosion of the recognition of those important values and also a substitution with another set of values -- values that are much more harsh and economically driven and that do not presume that the people, or the public, should not be placed in positions of vulnerability. The collapse of the safety net -- even if the dollars spent on social services have remained unchanged, the number of people in need has increased in recent years -- has gone against fundamental U.S. values.

As for expanding the safety net, something like the Affordable Care Act is a dramatic expansion, but it's not an expansion of government per se -- it's actually an expansion of perceived American values, and recognizes the need to provide the public with what is undeniably an important welfare good: access to health care. What concerns me is the misperception of Obamacare as an exclusively government-run program, when in fact what it relies on is access to the private market.

So, expansion of the social safety net is not limited to the government's responsibility. I think that there is a responsibility of the private sector to expand it as well, and the way that this relates to the social contract is really to rethink what it means for society to engage in the practice of deciding how it wants to live and how it wants to look after the most vulnerable. Most importantly, society must recognize that there are opportunities for economic development, opportunities for prosperity, which can accrue when we reopen for negotiation that social contract. The private sector, quite frankly, has as much an interest in insuring the social safety net works as the government does. They want to have people who are healthy enough to work and buy their products, they want people who are not leaving work because they have health conditions, and they want to keep employees working happy and prosperous, just like the government does. I think the expansion argument is not limited to some kind of expansion at great cost to the private sector -- it's an expansion that is in everyone's best interest.

Why is a reexamination of the values promoted by the social contract so necessary? In other words, how is the current, widely accepted interpretation stifling political movement?

There are two answers, and they're complementary. The first is: It's useful from time to time in the course of a country's history to revisit what those fundamental values are that we believe, that we think we know, and that we have adopted, but that we have never really challenged. They become almost carved in stone, but there's a bit of a broken-telephone problem that I think the reexamination helps to avoid. If people keep uttering the same interpretations of a 17th-century Lockean philosophy and haven't updated it for the present time, then not only is it a bad idea to talk about the social contract, but it could also be dangerous. It's always a good idea to revisit fundamental values that we think we hold dear, and that we think helped frame the country, but may need updating or contemporizing.

Secondly, the metaphor of the social contract is that it really is important for people to be thinking about civic literacy and public engagement in ways that are active and impactful. The social contract shouldn't be limited to voting every four years, and the ways that you engage in public deliberation should not be limited to whether you vote or don't vote, or who's running or don't like who's running. The idea of reimagining, rethinking, and renegotiating is as much about reenergizing civic literacy and reenergizing public engagement as it is about the social contract itself.

In what ways could improvements to civic literacy -- what you define as "a more informed appreciation of the origins of America's legal framework and culture by the general public" -- help alter perception of American values to be more accepting of reform?

I have to believe that if more people were more informed about how government and society works, then we would be more likely to be both satisfied with the election results that we get and satisfied with the policies that follow from those election results. I don't just mean the public -- our own elected officials could stand for a dose of civic literacy.

Ironically, if that happened, even if the person that you wanted to see elected didn't get elected, you would at least be in the position to say that "the best person won," because the process was fair, the public understood what the issues were, and the majority happened to select this person or that policy.

How could the social contract uphold or promote the Affordable Care Act, and why would some, primarily conservatives, argue that it does the opposite?

There's nothing politically left or right about the social contract, and no one should be afraid of it, because it's not being imposed by anybody. The ACA -- the public engagement, the awareness about the needs of society, and the fact that the law is currently the best available method for meeting the greatest number of needs -- is a demonstration of how the social contract can and should work. You had Congress that permitted it to occur -- we can debate how many people did or didn't favor it. You had the public sector and the private sector all actively engaged, and I suspect that when President Obama leaves office and his replacement is elected, there will be changes to the ACA. Those changes will work best when there's an open and informed debate. That open and informed debate is really the heart of what social contracting is all about.

Christina Breitbeil is a RealClearPolitics editorial intern.

The Jobs Program We Need

Eric B. Schnurer & Daniela Glick - July 17, 2014

There is some good news out of Washington: Bipartisan agreement has emerged on a major piece of legislation. The bad news: Congress missed a rare opportunity to demonstrate that it -- and our entire political system -- could achieve bipartisanship by combining the insights of both sides.

Shortly before the July 4 recess, the Senate passed the "Workforce Investment and Opportunities Act" -- a reauthorization of the 1998 federal Workforce Investment Act, the nation's major "jobs" law, which expired a decade ago and since then simply has been funded through the annual appropriations process. The House followed suit last week, and the measure is expected to become law. Unfortunately, the reauthorization is basically a continuation of what we've been doing for the last 25 years. Instead, we should be building on a quarter-century of experience in how to do better.

Workforce development is vital to our nation's future as global competition rises. Within the decade, roughly two-thirds of all jobs will require postsecondary education and training. When originally enacted, WIA was an innovative and bipartisan breakthrough that recognized this growing importance of advanced skill training and education. But that was in 1998, and since then reauthorization and reform have been held up by partisan differences: In simple terms, Democrats wanted more programs and Republicans wanted fewer.

Our involvement in workforce innovations in the states -- which actually administer the WIA-authorized programs -- tells us that Republicans are right: The current system is too program-heavy and centrally dictated by Washington. The Government Accountability Office has identified 47 federal employment and training programs administered by different agencies. This maze of programs and requirements is costly and inefficient.

But Democrats are also correct: New initiatives are needed to improve coordination among businesses, the government, and the country's various education systems, and to address the reality of global competition.

Instead of stasis, we need progress -- in this case, making federal workforce programs both more streamlined and more flexible, while at the same time more proactive in addressing the needs of businesses and workers. With Congress taking a pass, that opportunity -- and responsibility -- now falls to the states (which the Obama administration could aid by granting waivers). Here are five simple steps they should take:

  1. Create a more flexible, integrated, and comprehensive system. With the current web of programs, funding streams for specific purposes and populations, and arduous requirements, state and local governments cannot tailor their programs to their own needs and capabilities. We should unify funding streams to create a comprehensive school-to-career pipeline, letting states and localities experiment and develop what works best for them.

  2. Integrate workforce-development initiatives into broader efforts to improve the economy. Workforce development needs to be part of a cohesive strategy, not a side effort. Workforce development, education, investment, trade, technology, and macroeconomic policies all need to be aligned to support economic development activities and goals. A more skilled workforce is itself a vehicle of economic advancement, not just a tool for business recruitment. The most successful states make workforce programs part of their economic development agencies; more substantively, policies themselves must be integrated: If a state has developed a sector strategy to promote aerospace or advanced manufacturing, it shouldn’t have a workforce strategy targeted to preparing workers for retail trade or hotel management.

  3. Focus on demand: what local employers need now and what they expect to need in the future. Government programs too often train too many people for too few jobs, and not enough people in fields where they're really needed. That's why greater business input is needed. But the outmoded WIA-funded workforce boards, composed largely of local business leaders, resulted in meetings few attend instead of the broad-based input originally intended. New technologies can replace face-to-face meetings to greatly facilitate data collection and analysis, such as a pioneering "skills bank" approach that relies on a small group of employers in a particular industry to help pinpoint job descriptions and skill requirements, while computers analyze the results, match the skills standards with job seekers, and determine gaps in training and education.

  4. Broaden the system's focus and client base. The workforce-development system is conceived in most places as an adjunct to the welfare system, with priority on placing the low-skilled unemployed in the first low-wage or temporary job possible. Instead the goal should be true investment: The system should help Americans migrate up the educational-attainment scale so they can move up the wage scale -- from efforts targeted to the special needs of today's long-term unemployed and entry-level programs for low-skilled workers, to "quick-start" programs providing customized training for relocating firms and lifelong learning for incumbent workers through post-secondary institutions and on-the-job opportunities.

  5. Connect education to workforce needs. We need to integrate our now-separate workforce and education systems -- community college, higher education, and K-12 -- to offer continual opportunities for career advancement. Postsecondary schools, from community colleges and technical programs to state universities, need to work together not only to prepare students but also to make sure every graduate has the "soft skills" necessary to function well in the 21st-century workplace. Too often, higher-ed institutions consider themselves above mere workforce preparation while K-12 education is divorced from eventual real-world application. All students at all levels should be able to graduate with the skills they need to find a job that supports their families. That will require not abandoning the broader goals of education, but relating what students learn to the job demands most will eventually face -- and getting all segments of our education system to recognize that they must inter-relate on everything from curriculum and credit-granting to teacher preparation and career counseling.

One governor once told us that WIA's constraints ranked as governors' No. 1 complaint about the federal government, while another's chief-of-staff confided that WIA seemed the dullest subject in government -- fit only for "green-eyeshade types." With its current Rube Goldberg structure of funding streams and reporting requirements, this may be true -- but it shouldn't be. With a world-class workforce-development system, Americans could have higher-paying jobs, the world's cutting-edge industries could all cluster here, and crime and dependency could decrease. Simply put, there is nothing better we could do for our country than to start making our workforce-development system work for the 21st century.

Eric B. Schnurer is president of, and Daniela Glick is a senior analyst with, Public Works LLC, a consulting firm advising governments on a range of public-policy issues. They have worked with administrations in a dozen states on workforce-development reforms.

Robert VerBruggen - July 15, 2014

Drawing on data from a new study, Christopher Ingraham of WonkBlog has a striking chart today:

Of course, what's most shocking is the incredible spike in the rate at which black men with no high-school degree are incarcerated. And two other things stood out to me on a closer inspection: One, the ratio of black to white incarceration seems to have grown over the years, at least in some measures, and two, at every single point in time represented in every one of these six charts, a white male high-school dropout was less likely to be incarcerated than the average black man.

The usual disclaimer here is that we can't infer discrimination from disproportion (or even, necessarily, rising disproportion). At least some of this has to do with gaps in rates of offending. For example, while blacks are about 13 percent of the population, in victimization surveys conducted in 2001-2005 they were identified as the offender in 78 percent of violent crimes against blacks (who make up a disproportionate share of crime victims), 15 percent of violent crimes against whites, 19 percent of violent crimes against Hispanics, 27 percent of violent crimes against Asians, and 12 percent of violent crimes against Native Americans.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

Piketty, Poverty, Political Pooh

Gene Steuerle, The Government We Deserve - July 15, 2014

The 50th anniversary of President Johnson's War on Poverty has led to a flurry of articles and debates about whether that war succeeded. That debate has been reenergized by Thomas Piketty's best-selling bookCapital in the Twenty First Century, which argues that inequality is rising because returns to capital have risen relative to average economic growth. A solution to this inexorable force, Piketty claims, lies in some form of worldwide wealth tax.

In both cases, I find the political debate largely unproductive. Many conservatives and liberals pick at pieces of data and history to support their own forgone conclusions. Rather than seek practical margins for making progress, much of the discussion turns to thumbs up/thumbs down rhetoric or totally impractical solutions.

Here's how the data play out. Since the late 1970s, market-based measures of poverty and the distribution of income (that is, measures of income before taking account of government redistribution through taxes and transfers) improved very little in the first case and got worse in the second. Both did much better a few decades earlier, including up to the mid-1970s. PIketty bases his broad historical conclusions about growing inequality largely on market measures. In turn, researchers ranging from Gary Burtless at Brookings to Tim Smeeding at Wisconsin to Richard Burkhauser at Cornell to Diana Furchgott-Roth and Scott Winship at the Manhattan Institute have shown greater reductions in poverty and less growth in inequality of income or consumption when market-based income is adjusted for government taxes and transfers.

These two different ways of looking at the data make for strange bedfellows as the debate turns political. Conservative critics of the War on Poverty combine with liberal world-always-getting-worse warriors, who like to cite Piketty, to form conclusions based largely on the before-tax, before-transfer measures. They unite to attack the status quo, with one suggesting fewer transfers (the war failed) and the other higher taxes on the rich (the tax system failed). Liberal defenders of social welfare programs and conservative opponents of higher tax rates, in turn, conclude that on an after-tax, after-transfer basis the world is a lot better off than the other side asserts. They defend the status quo.

Here are the statistics that I ponder. In real terms, social welfare spending averaged about $7,500 per household at the time the War on Poverty was declared. By the time that Ronald Reagan was inaugurated in 1981, spending per household had grown to $15,000. And today it has doubled again from the start of the Reagan administration to about $32,000. (These figures do not even include tax expenditures for social welfare, such as pension, housing, and wage subsidies, which averaged about $7,000 per household in 2013.) Meanwhile, GDP per household grew from about $70,000 in 1964 to nearly $140,000 today.

Over this same 50 years the official thresholds for measuring who is in poverty have not grown one dollar in real terms. These measures, adjusted only for inflation, in a sense, are based on absolute poverty, unadjusted for the new goods and services a growing economy provides or, said another way, for whether a household's income keeps up with average or median income in the economy. For a family of four, for instance, the nonfarm poverty threshold is crossed when a household's income falls below roughly $23,550 today, essentially the same level as in 1964. For a single person, the poverty threshold equals $11,490

"Wait a second," you may think. The government spends far more on social welfare than would be required to give every household support above poverty levels. And in almost every year there have been substantial real increases in the amount of transfers made. Why, then, has the poverty rate not fallen more?

There is no single answer. Here are four pieces of the puzzle:

Huge gains at the top. Inequality in market-based income DID grow substantially since the late 1970s, the period when progress against poverty slowed. The ability of high-income individuals at the top of a winner-take-all economy to capture much of the extra rewards that derive from monopoly or oligopoly settings does help explain some of the stagnation in earnings growth for those with average or low earnings.

It doesn't explain why the public supports, which have continued to grow, haven't made greater headway in improving the skills of the population enough that their market incomes would rise more. That brings us to the next three pieces of the puzzle: the extent to which the public money has been spent to help providers, help the middle class, and pay for health care.

Providers. Beneficiaries include providers who have captured large portions of government, not just private market, money. Before you start looking elsewhere, just remember that providers include, among others, doctors, drug manufacturers, social workers, lawyers, lenders, other financial intermediaries, builders, housing officials, software developers, tax preparers, government contractors, and, for that matter, researchers like myself.

The Middle Class. The middle class rather than the poor has also captured very large portions of the social welfare budget, largely in ways that have for decades encouraged them to retire and work less for greater portions of their lives. Early growth in Social Security benefits, for instance, did a good deal to reduce poverty, but in more recent decades has made less progress because growth—the marginal increase in payments—has been concentrated preponderantly on more years of support and higher levels of benefits for everyone, from rich to poor alike. Remember that a program can on average be successful in meeting some objectives, yet still target its incremental budget poorly. Incremental spending in our public retirement programs in the modern age increasingly operates to decrease the market incomes of the middle class and, despite billions of additional dollars spent each and every year, only modestly increases the transfers received by the poor.

Health Care. A large share of the growth in the income of almost everyone but the rich has come not in cash but in the form of government and employer-provided health care and insurance. One-third of per capita income growth in our economy from 1990 to 2010, for instance, went simply to pay for real increases in health care, as average annual health care spending per household from all sources ballooned to approximately $24,000. Measures of both market income (e.g., Piketty) and most measures of after-transfer income (e.g., the official poverty measure) fail altogether to count this major source of income. Yet for many, particularly those below median income, that item has dominated the way their income has grown for perhaps three decades. The CBO has tried very recently to count health insurance received as income in some of their work, but its efforts are an exception to the rule.

These four pieces interlock in various ways. For instance, more years and money in Social Security support, particularly as people live longer, has encouraged the average worker to retire for more than a decade longer than in 1940, when benefits were first paid, thus reducing their market income. Because many of the government's expenditures on health care have been captured by providers, the public's gain in benefits comes out to only a fraction of each additional $1 the government spends, while in the private sector cash compensation stagnates to pay for higher costs of health insurance.

In sum, the debate over poverty and inequality deserves renewed attention. However, it provides a quandary to many in both major political parties, who are largely mired in mid-20th century debates and fighting the thumbs-up, thumbs-down battles that blocks improvement from either side. The times beg for a 21st century agenda (an issue I try to address in my new book, Dead Men Ruling).

Gene Steuerle is the Richard B. Fisher chair and an Institute Fellow at the Urban Institute. This piece originally appeared on his blog, The Government We Deserve.

Interpreting Obamacare

Robert VerBruggen - July 15, 2014

The broad constitutionality of Obamacare was settled some time ago, but a narrower lawsuit is making waves this week -- a decision from the D.C. Circuit could happen as early as today, and the case could eventually land before the Supreme Court. Advanced most prominently by law professor Jonathan Adler and the Cato Institute's Michael Cannon, the suit claims that exchanges set up by the federal government (as opposed to the states) are not authorized to hand out premium subsidies. Considering that a majority of states have decided not to set up their own exchanges -- and that subsidies are a key aspect of the law -- this is a very big deal.

The argument features two major contentions: One, the plain text of the law restricts the subsidies to state-run exchanges; two, lawmakers did this intentionally rather than by mistake.

In section 1401, the act gives the formula for calculating how much premium assistance each enrollee receives. These subsidy amounts depend on the premiums charged in plans offered through "an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act."*

"Established by the State" seems clear enough. And the invocation of section 1311 makes the case even stronger, because 1311 deals with states that set up their own exchanges. It's not until section 1321 that we arrive at this text:

[In the event that a state does not establish an exchange that meets the law's requirements,] the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.

For those attracted to the idea of interpreting laws according to their "plain meaning" as a typical person would understand it, this more or less settles the question. To avoid this conclusion without going into legislative history, you have to make some pretty elaborate arguments about how the law seems designed to work; claim that the federal exchanges are made on behalf of the states and therefore can be treated as exchanges "established by the State"; point to other provisions that seem to assume federal exchanges will give out subsidies; etc.

But a literal reading doesn't always win the day -- under an important precedent, courts can be heavily deferential to bureaucracies' interpretations of the law when the "intent of Congress" is insufficiently clear. And that's where Cannon and Adler's second contention comes in. They say that Congress did this on purpose as an incentive for states to set up their own exchanges. In this view the law's supporters changed their tune when things didn't go as they expected and many states declined (or tried and failed) to set up exchanges. The incentive didn't work, and now it's threatening the success of the law.

You can see their full argument starting on page 10 here, but the gist is that if you go through the legislative history, you can find various proposals and comments that are consistent with this interpretation. For example, in a white paper, Sen. Max Baucus suggested a small-business tax credit modeled "on a bipartisan bill that had been referred to the Finance Committee in 2008, which conditioned credits on states establishing Exchanges and enacting other health insurance laws." And law professor Timothy Jost, who was heavily involved in the debate that occurred during the drafting process, noted the problem with the federal government trying to force states to set up exchanges and suggested Congress "could exercise its Constitutional authority to spend money for the public welfare (the 'spending power'), either by offering tax subsidies for insurance only in states that complied with federal requirements (as it has done with respect to tax subsidies for health savings accounts) or by offering explicit payments..." Some members of Congress from Texas even worried that their constituents would be "no better off" if their state didn't create an exchange.

So, this notion existed during the drafting process. But did the drafters have it in mind with the final text, or did they just mess up? There's no smoking gun, and many key figures say the subsidies were supposed to be universal. For example, Jonathan Cohn of The New Republic recently wrote (follow the links for many, many more details):

Not once in the 16 months I reported on the formal congressional debate did any of the law's architects suggest they were thinking along these lines. It wouldn't make sense in the context of the law, which depends upon those subsidies to accomplish its primary goal. It's why assessments of Obamacare's impact, including those from the Congressional Budget Office, assumed that residents of all states would have access to the tax credits.

That's not just my opinion. It’s the opinion of experts like Nicholas BagleySamuel Bagenstos, and Timothy Jost. It’s also the opinion of former Capitol Hill staffers like Liz Fowler, who was the chief health care staffer on the Senate Finance Committee and knows as much about congressional intent as anybody. "Of course Congress did not intend to deny anyone in any state access to tax credits to which they are entitled," Fowler told me in December, 2012, when I first wrote about these lawsuits. "That is not how the law is drafted and that is not how it was scored by the CBO."

It's a tricky case, at least once you look beyond a literal interpretation of the law, and it will take some time to play out. There's one thing both sides can agree on, though: "The ACA is not a model of clear drafting."

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

* Here's the full text:

‘(2) PREMIUM ASSISTANCE AMOUNT- The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of--

‘(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer's spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or

‘(B) the excess (if any) of--

‘(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over

‘(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer's household income for the taxable year.

Shortly after this, the law explicitly clarifies that the "applicable second lowest cost silver plan" referred to in option (B) is "offered through the same Exchange through which the qualified health plans taken into account" in option (A) were.

Losing Our Liberties, One Degree at a Time

Thomas K. Lindsay - July 15, 2014

Does democratic liberty depend on civic education? America's founders thought so. While we expect students to acquire job-relevant skills in college, we also hope for something more, something higher, than employment training alone, as expressed by Thomas Jefferson's cautionary remark, "Any nation that expects to be both ignorant and free ... expects what never was and never will be." Our freedoms are not guaranteed. They must be re-earned, through being relearned, by every generation.

Forget all that now. Harris Pastides, president of the University of South Carolina, has sparked a conflagration by refusing to obey a state requirement that public universities instruct students in the "essentials of the United States Constitution, the Declaration of Independence, and the Federalist Papers." His justification for flouting the law? It's "archaic." This is but the latest example of American higher education's abdication of its responsibility to do more than provide job training (which, by the way, it's also doing poorly, say employers).

It would be unfair to focus our indignation on Pastides alone. Today, most colleges fail to require even one introductory course in American government. The result? Department of Education statistics show that only one-third of graduates ever complete such a course. More disturbing is the reason for this academic turnabout. Carol Schneider, president of the Association of American Colleges and Universities, reported that "after five years of active discussions on dozens of campuses," she found "not just a neglect of but a resistance to college-level study of United States democratic principles."

Required courses constituting a "core curriculum" of studies in American government and American history, as well as economics, philosophy, and "Western Civ," were attacked in the late '60s and early '70s as irrelevant, producing a decades-long dismantling of such requirements and with them, the study of the Great Books. The effect has been all too predictable: The landmark national study of collegiate learning Academically Adrift employed the Collegiate Learning Assessment (CLA) to measure how much undergraduates increase their mastery of fundamental intellectual skills during college. The study found that 36 percent of students showed "small or empirically non-existent" gains in "general collegiate skills" -- critical thinking, complex reasoning, and writing skills -- after four years invested in college.

A new program at the University of Texas-Austin is standing athwart this national decline, crying "Stop!" UT's Thomas Jefferson Center for the Study of Core Texts and Ideas, under the direction of professors Thomas and Lorraine Pangle, has launched the Jefferson Scholars Program, a rigorous, six-course, unified sequence in the "Great Books and ideas of the ancient, medieval, and modern worlds," open to incoming freshmen in all schools and divisions of UT.

The initial rush of applications for the program from high-school seniors is pleasantly surprising. Two-thirds of applications to date are from students who will be enrolling in schools other than the liberal arts -- nursing, architecture, engineering, business, geophysics, and the natural sciences.

It's easy to see the reason for this enthusiasm. A survey of the Jefferson Scholars Program's six courses will cause famished seekers of genuine liberal education to salivate. The first semester's classes, "The Bible and Its Interpreters" and "Classics of Political and Social Thought," focus on the theme "Justice, Human and Divine." Together, these courses examine "some of history's most profound reflections on good and evil, on human nature and the character of human excellence, on whether there is a God and what can be known about him, and on the principles that should guide our collective lives as political communities."

The second semester's courses, Discovery of Freedom and Era of the American Revolution, examine the theme "Freedom, Ancient and Modern." The two classes compare the discovery of political freedom in Greek antiquity with its modern understanding and implementation by America's Founders.

The final semester's offerings, America's Constitutional Principles and Masterworks of World Drama, center on the theme "Leaders and Leadership." America's Constitutional Principles provides an "intensive study of the U.S. Constitution, the vision of justice and liberty that it embodies, and some of the leaders and movements that have subsequently worked to realize that vision." Masterworks of World Drama examines "classic plays from antiquity to the present, with a focus on the theme of just and effective leadership." As in the prior four courses, students read a number of the Great Books, here including those of Aeschylus, Plato, Aristotle, Sophocles, Aquinas, Shakespeare, Luther, Hobbes, Locke, the American Founders, Tocqueville, and Nietzsche.

Lovers of intellectual and political freedom can only hope that the Pangles, not Pastides, represent the future of the American higher education. "Whenever the people are well-informed," wrote Jefferson, "they can be entrusted with their own government; that, whenever things get so far wrong as to attract their notice, they may be relied on to set them right."

However, if we fail to restore to American universities their proper task of enhancing critical thinking and civic education, in short order we shall lose the capacity for self-government on which individual liberty and limited government ultimately depend.

Thomas K. Lindsay directs the Center for Higher Education at the Texas Public Policy Foundation and is editor of He was deputy chairman of the National Endowment for the Humanities under George W. Bush. He recently published Investigating American Democracy with Gary D. Glenn (Oxford University Press).

Smart Growth: Facts vs. Ideology

Randal O'Toole, Antiplanner - July 14, 2014

Debates over smart growth -- sometimes known as new urbanism, compact cities, or sustainable urban planning, but always meaning higher urban densities and a higher share of people in multifamily housing -- boil down to factual questions. But smart-growth supporters keep trying to twist the arguments into ideological issues.

For example, in response to my Minneapolis Star Tribune article about future housing demand, Thomas Fisher, the dean of the College of Design at the University of Minnesota, writes, "O'Toole, like many conservatives, equates low-density development with personal freedom." In fact, I equate personal freedom with personal freedom.

Fisher adds, "we [meaning government] should promote density where it makes sense and prohibit it where it doesn't"; in other words, restrict personal freedom whenever planners' ideas of what "makes sense" differ from yours. Why? As long as people pay the costs of their choices, they should be allowed to choose high or low densities without interference from planners like Fisher.

Another writer who makes this ideological is Daily Caller contributor Matt Lewis, who believes that conservatives should endorse new urbanism. His weird logic is conservatives want people to love their country, high-density neighborhoods are prettier than low-density suburbs, and people who don't have pretty places to live will stop loving their country. Nevermind that more than a century of suburbanization hasn't caused people to stop loving their country; the truth is there are many beautiful suburbs and many ugly new urban developments.

Lewis adds, "Nobody I know is suggesting that big government -- or the U.N.! -- ought to mandate or impose these sorts of development policies." He apparently doesn't know many urban planners, and certainly none in Denver, Portland, San Francisco, Seattle, the Twin Cities, or other metropolitan areas where big government in the form of regional planning agencies (though not the U.N.) are doing just that. If new urbanism were simply a matter of personal choice, no one would criticize it.

The real issues are factual, not ideological.

Fact #1: Contrary to University of Utah planning professor Arthur Nelson, most people everywhere prefer low-density housing as soon as they have transport that is faster than walking. While a minority does prefer higher densities, the market will provide both as long as there is demand for them.

Fact #2: Contrary to Matt Lewis, American suburbanization did not result from a "post-World War II push for sprawl" coming from "the tax code, zoning, a federally financed highway system, and so on." Suburbanization began before the Civil War when steam trains could move people faster than walking speed. Most American families abandoned transit and bought cars long before interstate highways -- which, by the way, more than paid for themselves with the gas taxes collected from the people who drove on them. Nor did the tax code promote sprawl: Australians build bigger houses with higher homeownership rates in suburbs just as dispersed as America's without a mortgage interest deduction.

Fact #3: Contrary to Thomas Fisher, low-density housing costs less, not more, than high-density. Without urban-growth boundaries or other artificial restraints, there is almost no urban area in America short of land for housing. Multifamily housing costs more to build, per square foot, than single-family, and compact development is expensive because the planners tend to locate it in areas with the highest land prices.

The relative prices I gave in my article -- $375,000 for a 1,400-square-foot home in a New Urban neighborhood vs. $295,000 for a 2,400-square-foot home on a large suburban lot -- are typical for many smart-growth cities: compare these eastside Portland condos with these single-family homes in a nearby Portland suburb.

Fact #4: Contrary to Fisher, the so-called costs of sprawl are nowhere near as high as the costs of density. Rutgers University's Costs of Sprawl 2000 estimates that urban services to low-density development cost about $11,000 more per house than services to high-density development. This is trivial compared with the tens to hundreds of thousands of dollars added to home prices in regions whose policies promote compact development.

Fact #5: Contrary to University of Minnesota planning professor Richard Bolan, the best way to reduce externalities such as pollution and greenhouse gases is to treat the source, not try to change people's lifestyles. For example, since 1970, pollution controls reduced total air pollution from cars by more than 80 percent, while efforts to entice people out of their cars and onto transit reduced pollution by 0 percent.

Fact #6: Contrary to Lewis, suburbs are not sterile, boring places. Suburbanites have a strong sense of community and are actually more likely to engage in community affairs than city dwellers.

Fact #7: Smart growth doesn't even work. It doesn't reduce driving: After taking self-selection into account, its effects on driving are "too small to be useful." It doesn't save money or energy: multifamily housing not only costs more, it uses more energy per square foot than single-family, while transit costs more and uses as much or more energy per passenger mile as driving. When planners say smart growth saves energy, what they mean is you'll live in a smaller house and have less mobility.

Fact #8: If we end all subsidies and land-use regulation, I'll happily accept whatever housing and transport outcomes result from people expressing their personal preferences. Too many planners want to control population densities and transport choices through prescriptive land-use regulation and huge subsidies to their preferred forms of transportation and housing.

These planners think only government can know what is truly right for other people. Even if you believe that, government failure is worse than market failure and results in subsidies to special interest groups for projects that produce negligible social or environmental benefits.

If urban planners have a role to play, it is to ensure people pay the costs of their choices. Instead, it is planners, rather than economists such as myself, who have become ideological, insisting density is the solution to all problems despite the preferences of 80 percent of Americans for low-density lifestyles.

This piece originally appeared at The Antiplanner.

The D.C. Government's Bizarre Trash Can Saga

Rich Tucker - July 14, 2014

Americans count on government for far too many things these days. It handles pensions (Social Security) and health care (Medicare, Medicaid, the VA, Obamacare), and regulates everything from banking (Dodd-Frank) to breathing (EPA).

But if we're going to assume government is competent to handle such big things, it's worth looking at how it deals with more mundane tasks. Such as collecting the trash.

Earlier this year, District of Columbia residents were told that their trash cans and recycling bins would be replaced. And, indeed, new cans were delivered with impressive haste all across the District. Perhaps this odd outbreak of government efficiency was designed to convince residents that embattled Mayor Vincent Gray deserved to keep his job.

If that was the goal, mission unaccomplished. Gray lost the Democratic primary and, in the one-party District, will be on the streets after November's election. And for a time, it seemed he might find those streets impassable, since they were clogged with old garbage cans.

You see, when they dropped off new cans, the sanitation workers failed to remove thousands and thousands of the old ones. The cans just bumped around, unwanted by anyone. It could be part of a Seinfeld routine: "Have you ever noticed how hard it is to throw away a garbage can?" Plenty of cans with bright yellow stickers imploring trash men to "Take me!" were ignored.

Mina Karini, an artist living in the District, saw an opportunity, as all good artists do. She could improve the environment while also gathering raw material for one of her projects. So she and a friend set out one night to collect some of the waste waste bins.

She insists they collected only bins that had the yellow stickers on them. "The words 'Take me' mean people don't want them anymore," she told the Washington Post.

Oh, but somebody wanted them.

A Secret Service agent with a bit of time on his hands informed D.C. police that he'd seen a man "walk stealthily down the sidewalk with a hood over his head to conceal his face collecting DPW recycling bins." The jig was up. Karini and her friend Timothy Logan Melham were arrested and charged with second-degree theft. The cans were still D.C. property, apparently, even if residents didn't want them and the city wouldn't remove them.

The judge ordered the can hunters "to undergo drug testing and avoid any criminal offenses," and set an August trial date. Prosecutors let the pair sweat for a few weeks, then quietly dropped the charges.

In any event, the caper put the unwanted trash bins on the front page of Washington's establishment newspaper, so D.C.'s government swung into action. Starting in May, the question wasn't how to get rid of a trash can; it was how to hold on to one.

More than a dozen residents saw their new trash cans collected and hauled away by city workers. This included cans stored on private property. "The men seemed to deem any can outside the garages or gates as being on public property, when this is emphatically not true," one resident told the Washington Post. She chased the haulers down and forced them to give up her cans. Others weren't so active, and lost their cans entirely.

Now residents say their mantra will be "hide any cans you want to keep," although that advice isn't helpful for those who want to use the cans in the traditional way -- that is, place them along the curb with trash in them, expecting sanitation workers to leave them behind.

True, the cans are technically city property, and the District government claims the old bins are worth about $1.50 each. Yet it turns out these valuable resources weren't being recycled -- they were being treated like trash. "City officials admitted Tuesday that sanitation crews dumped at least 132 truckloads of plastic bins -- a third of the more than 16,000 old cans collected last week -- alongside city waste and hauled them all off to Virginia to be incinerated," the Post reports. Well, there's $8,000 up in smoke. Good thing we didn’t allow the cans to become part of an art exhibit.

Predictably, a spokesman explained that: "Under these circumstances, where safe movement was compromised, the benefit of improving safety exceeded the cost of not recycling." Of course. "Safety." The last refuge of governments everywhere. Whether it's strip searches at the airport or mandatory health insurance, rest assured the government knows what you need and is merely looking out for your "safety."

The question is why Americans trust government so completely. It cannot collect our trash efficiently, but we expect it to provide for our safety, our retirement, our health care, and many other important things. That's not likely to end well.

Rich Tucker is a writer living in Northern Virginia. You can e-mail him at

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