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Archive for May, 2013

How to Save Social Security

May 31st, 2013

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There are a lot of charts, numbers, and projections in the annual report released by the Social Security Trustees Friday, but they really boil down to this: Social Security’s trust fund has 20 years to live.

Started in 1935 as the first major strand in America’s safety net, Social Security will arrive at insolvency at the venerable age of 98. By ignoring this reality, Congress is guaranteeing that the program’s reserves will expire, forcing benefits for the retired and disabled to immediately fall by 23 percent starting in 2033.

But the retired and disabled won’t be the only victims. The rising cost of Social Security and health care programs is crowding out investments in kids and future generations. In the mid-1960s, the federal government spent three dollars on investments — in education, research, and infrastructure — for every one dollar on entitlements. In 2023, it will spend one dollar on investments for every five dollars on entitlements. That means less money for teaching kids, curing diseases, and building roads.

The question now is whether the same dysfunctional Congress that cannot seem to muster enough votes to name a post office can touch the third rail of politics, to keep Social Security from going down and taking public investments with it.

To that we answer a loud no and yes. No, Congress is unable to develop and pass a Social Security solvency plan with the necessary super majority in the Democratic Senate and a majority in the Republican House. That piece of legislation is a fantasy. But the same two chambers could pass a law that outsources the job to a commission, to develop the plan and leave Congress in the position with only two choices: vote yes on the commission plan to save Social Security or vote no to let its financing dry up. Read the rest of this entry »

Obama Pilots Drone Policy Through Political Headwinds

May 28th, 2013

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During the 2004 campaign, Sen. John Kerry, the Democratic presidential candidate, made this statement to the New York Times Magazine:

“We have to get back to the place we were, where terrorists are not the focus of our lives but they’re a nuisance. As a former law enforcement person, I know we’re never going to end prostitution. We’re never going to end illegal gambling. But we’re going to reduce it … to a level where it isn’t on the rise. It isn’t threatening people’s lives every day. It’s something that you continue to fight, but it’s not threatening the fabric of your life.”

Republicans instantly denounced Kerry’s statement as “a pre-9/11 view of the world.” President George W. Bush said at a campaign rally, “Senator Kerry talked of reducing terrorism to a, quote, ‘nuisance,’ and compared it to prostitution and illegal gambling. I couldn’t disagree more. Our goal is not to reduce terrorism to some acceptable level of nuisance. Our goal is to defeat terrorism by staying on the offensive.”

The Bush-Cheney campaign ran a television ad attacking Kerry for saying that defeating terrorism was “more about law enforcement than a strong military.” The ad concluded, “How can Kerry protect us when he doesn’t understand the threat?”

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Ending China’s Cyberattacks

May 15th, 2013

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Last week, the Pentagon came out and said it: Cyberintrusions on Defense Department computer systems, as well as economic and defense industrial base sectors are “directly attributable to the Chinese government and military.” China’s cyberintrusions are a serious matter. But why does China’s hacking strike everyone as beyond the pale?

Of course China wants to steal our secrets – after all, espionage is considered the second oldest profession. It’s also hardly surprising that China is cyberspying on America’s defense industrial base to gain military advantage. Governments, no doubt including ours, do this all the time.

No, the real affront here is that the Chinese government is using all the cybertools of the state to break into private sector companies and steal information and ideas for purely commercial advantage. Given that half of China’s economy is owned or effectively controlled by the Chinese government, China has a particular incentive to share ill-gotten secrets with its extensive roster of state-owned enterprises and national champion companies. Beijing is providing them with significant – and highly unfair – advantages over their global commercial competitors.   Read the rest of this entry »

Stick to Targeted and Discrete Policies

May 15th, 2013

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Energy policy is difficult to move, in part because there’s really no such thing as a “must-pass” energy bill. It doesn’t carry the same urgency or institutionalized process as certain annual taxing and spending bills, and it certainly doesn’t generate the same passion in the electorate as health care, immigration, or other social policy priorities. Let’s face it…energy policy is the stowaway, not the train. You can slip a discrete energy policy into a larger vehicle, as we saw with the PTC’s inclusion in the fiscal cliff deal. But building a large, comprehensive energy bill in this political era is basically the equivalent of a dozen stowaways standing by the tracks deciding to tie themselves together. Good luck with that, guys.

Recent movement of hydropower and efficiency bills, along with bipartisan support for master limited partnerships and ARPA-E, has shown us the potential for passing targeted energy legislation in this Congress. Perhaps these particular issues are unique in that they tend to gin up relatively little controversy. But an incremental and targeted approach can be effective with contentious policies as well. Returning to our earlier example, the PTC for wind has become a target of hyper-conservative groups in recent years. Yet a significant block of Republican lawmakers, including tea party favorites like Steve King and freshman class president Kristi Noem supported the extension. To be precise, they actually FOUGHT for it, pressuring their leadership and colleagues to move the provision. Focusing solely on the PTC for wind allowed geography to trump partisanship. This prioritizing of parochial issues over political ideology is a well-known phenomenon in energy policy, and it has often provided opportunities for compromise and progress in Congress. But the influence of the “geography effect” is diminished once the policy in question is merged with others that are of less interest or that present a conflict for lawmakers.

For the House and Senate, the strategy that seems to be showing the most promise is to keep it simple (and practical), stupid. Smart policy initiatives will minimize variables that give lawmakers a reason (or an excuse) to vote against clean energy interests that matter to folks back home. And they will take advantage of unique coalitions that each individual issue can bring to the table based on geography, local economies, etc. Legislators can also encourage the Administration to continue its use of executive orders to increase efficiency and clean energy procurement within federal agencies, and to pursue collaborations with industry to iron-out regulatory hurdles that could slow the adoption of clean technologies.

The bottom line is, there is plenty to be done. It just can’t be done all at once. So pick your spot on the apple and start taking a bite.

This piece was originally published in the National Journal Energy Experts Blog.

In Search of the Next Crisis

May 13th, 2013

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The deficit is going down. Woo-hoo!  Let the celebrations begin.

Oh, wait. That may not be altogether a good thing. Certainly not for Republicans. They need an out-of-control deficit to bludgeon Democrats into cutting more spending. It may not be good news for the economic recovery either. Budget austerity means slower growth. Want proof? Look at Europe.

The Congressional Budget Office estimates that this year’s federal budget deficit will drop from $1.1 trillion to $845 billion. Economists at Goldman Sachs project that we will get the deficit under control within two years. Why is this happening?

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3 Key Trade Trends the U.S. Can’t Ignore

May 8th, 2013

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When America debated the North American Free Trade Agreement in 1993, Groundhog Day – a film about doing the same things over and over – was a box office hit. Since then, our trade debates have often been like Groundhog Day, with trade supporters and critics repeatedly recycling well-worn talking points. But before everyone dusts off old scripts for upcoming debates about trade deals with Asia and Europe, it’s worthwhile to consider what America might learn from more recent trade developments – especially those currently happening outside the United States.

Three trends in global trade highlight why it’s more vital than ever that America continue to play a strong role in writing robust rules for trade.

1. America’s Not the Only Game in Town. As America works to conclude a Trans-Pacific Partnership trade deal and to ramp up new trade talks with the European Union, it’s important to remember that other major economies are also pursuing a bevy of new trade deals.

There are already hundreds of trade agreements in force among groups of countries that don’t include the United States, with many more under negotiation. The EU, for example, is negotiating agreements with Canada, India and Japan. And China, Japan and South Korea have begun talks on a pact that would boost trade among the world’s second-, fourth- and twelfth-largest economies. These three countries – together with 13 regional neighbors – are also negotiating a massive Regional Comprehensive Economic Partnership that would tie together 16 countries with a combined GDP of over $26 trillion.

For the United States, the implications of growing trend are clear – if we don’t continue to engage in developing new norms for global trade, global competitors like China surely will.

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