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David Schleicher - March 31, 2015

With the nation's Highway Trust Fund projected to go broke at the end of this summer and Congress unable to agree on a permanent fix, it is an opportune time to reexamine the so-called consensus on infrastructure funding -- that we need more of it and now. Focusing on how much we spend leaves out a more important question: how much infrastructure we get for our money.

Put bluntly: the costs of U.S. infrastructure are too damn high.

How high? It's not easy to find comprehensive data on infrastructure costs around the globe. But with help from various government and business websites as well as some very busy bloggers, we pulled together data on 144 planned and finished rail projects across 44 countries.

We can't know whether these data are truly representative of all rail projects recently built or currently underway. However, we do know whether projects feature tunnels, stations, or elevated tracks, so we can be fairly certain we are comparing apples with apples.

America Is #1 (in Expensive Rail Projects)
It turns out that, at least in our sample, the United States is home to the four priciest (per kilometer) rail and majority-tunnel projects in the world.

Towering among giants is New York City's East Side Access project to join the Long Island Rail Road and Grand Central Terminal, which will cost $3 billion per kilometer by the time it's finished in 2023. Beyond East Side Access, New York has two more projects (the Second Avenue Subway and No. 7 Line extensions) in the $1.5-to-$2-billion-per-kilometer range.

To put these numbers in global perspective, New York's Second Avenue Subway will cost roughly eight times more than Tokyo's Koto Waterfront line and 36 times more than Madrid's Metrosur tunnels on a per-kilometer, purchasing power parity (PPP) basis.

But this is not strictly a New York problem. Outside of New York, there are three more U.S. projects in the top 12: Boston's proposed Red-Blue Line Connector, San Francisco's Central Subway, and Los Angeles's Westside Subway Extension.

Why Is U.S. Rail So Expensive?
An obvious answer is that land costs are higher in the United States, especially in built-up cities like New York and Boston. But can U.S. land costs really be that much higher than those in other wealthy, dense cities such as Paris? Or Tokyo?

Construction costs don't explain the gap either. Take Paris's Métro Line 4 extension Phase 1, which came in at just PPP $193 million per kilometer, despite passing underneath seven Métro lines, sewers, and four underground carparks, plus over two regional RER lines.

What about labor costs? Critics love to hate the Davis-Bacon law and other rail-specific labor regulations. But the following chart shows only a weak relationship between project cost and metro-area GDP, a rough proxy for wages, especially if we remove the top four projects in New York and Boston. And presumably higher wages also have something to do with higher worker productivity.

Beyond labor laws, several U.S. regulations (Buy America provisions, safety requirements beyond international standards) affect the cost of rolling stock and other operating expenses. But many of these laws do not apply directly to construction. And for regulations to explain U.S. costs, American laws would have to be tougher than those in Europe, where trade unions are much more powerful. (France, anyone?)

People also point fingers at the decentralization of transportation planning and funding in this country. But, according to IMF data, the United States is only slightly more fiscally decentralized than countries with much cheaper rail infrastructure, such as Japan. And heavily centralized countries like the United Kingdom often have very high rail-construction costs.

Some Possible Explanations
Many of the world's most expensive projects are in the United Kingdom, Australia, and New Zealand, which, like the United States, have common-law systems. So it might be that common-law systems provide legal protections for property owners -- allowing more lawsuits over noise, smoke, and other nuisances, as well as limits on eminent domain -- that increase costs by forcing the government to pay off opponents or to locate projects inefficiently to avoid angering property owners. But some non-common-law countries, like Germany, also have strong legal protections for property holders yet low rail-construction costs.

Is it electoral politics? The United States and many Commonwealth countries elect leaders by district rather than party-based proportional representation. Districted elections -- at the national, state, or local level -- may lead to inefficient projects as legislators try to bring pork home to their constituents or use "aldermanic privilege" to block transit from going through their districts, increasing costs.

Political fragmentation may also be a culprit. Rail projects often have to run through many localities and states. Local governments frequently have difficulty contracting with one another, which can inflate construction costs by encouraging duplication rather than sharing resources.

A common solution to the problem of inter-local contracting is creating regional bodies, but these entities have their own problems -- particularly in terms of accountability.

Why does infrastructure cost so much in the United States? We don't know yet. But it's worth realizing that costly mega-projects make people distrustful that good projects will come to the fore. Figuring out why costs are so high may be crucial not only to bringing those costs down, but to getting a real consensus on infrastructure and a reliable source of funds for the nation's roads, bridges, and transit.

Tracy Gordon is a senior fellow of the Tax Policy Center, a project of the Urban Institute and the Brookings Institution. David Schleicher is an associate professor of law at George Mason University.

The Cost of a Cure

Charles Ornstein, ProPublica - March 31, 2015

Medicare spent $4.5 billion last year on new, pricey medications that cure the liver disease hepatitis C -- more than 15 times what it spent the year before on older treatments for the disease, previously undisclosed federal data shows.

The extraordinary outlays for these breakthrough drugs, which can cost $1,000 a day or more, will be borne largely by federal taxpayers, who pay for most of Medicare's prescription drug program. But the expenditures will also mean higher deductibles and maximum out-of-pocket costs for many of the program's 39 million seniors and disabled enrollees, who pay a smaller share of its cost, experts and federal officials said.

The spending dwarfs the approximately $286 million that the program, known as Part D, spent on earlier-generation hepatitis C drugs in 2013, said Sean Cavanugh, director of Medicare and deputy administrator at the Centers for Medicare and Medicaid Services (CMS).

The most-discussed of the new drugs, Sovaldi, which costs $84,000 for a 12-week course of treatment, accounted for more than $3 billion of the spending. Spending on another drug, Harvoni, hit $670 million even though it only came on the market only in October. Bills for a third drug, Olysio, often taken in conjunction with Sovaldi, reached $821 million.

Medicare also spent $157 million on older hepatitis C drugs in 2014, bringing the total spending for the category to more than $4.7 billion.

The spending surge is unlike anything Part D has seen. The nine-year-old program has benefited in recent years from a slowdown in prescription drug costs as several blockbusters, including the cholesterol-lowering drug Lipitor and the blood thinner Plavix, have lost patent protection and have faced competition from generics.

The new hepatitis C drugs, along with other expensive specialty medications in the pipeline, threaten to drastically increase the program's costs. The federal government spent $65 billion on Part D in 2013, according to the Medicare Payment Advisory Commission. That figure doesn't include monthly premiums paid by patients.

An analysis published last year on the website of the health-policy journal Health Affairs suggested that 350,000 Medicare beneficiaries have hepatitis C, although many don't know it. That figure is expected to increase as Baby Boomers, the group with the highest prevalence of hepatitis C, become eligible for Medicare.

It generally takes the government more than a year to compile data on drug spending, but CMS provided the data on hepatitis C drugs to ProPublica in response to a Freedom of Information Act request and follow-up inquiries.

Medicare officials said they are watching the costs carefully, and early indications suggest that this year's spending is on track to match or even exceed last year's, Cavanaugh said.

"We're all waiting to see when it plateaus or when it possibly goes back down," he said in an interview. "When will that pent-up demand be sated?"

Medicare's costs for the drugs, at least in 2014, appear to be far higher than those incurred by state Medicaid programs for the poor, which collectively spent $1.2 billion on the drugs in the first nine months of the year. (This data is preliminary; data for the entire year is not yet available.)

Many Medicaid programs, as well as private insurance companies, took a more restrictive approach toward the drugs than Medicare did, often requiring that patients have advanced liver disease to be eligible to receive the pills.

Medicare has a more permissive standard, requiring the insurance companies that administer Part D on its behalf to cover medically necessary drugs for any indication approved by the Food and Drug Administration or recommended in clinical guidelines.

The new hepatitis C drugs have a higher cure rate -- 90 percent or higher -- than previous treatments, as well as fewer harmful side effects. Some studies have shown that, despite their price tag, the drugs justify their cost based on the better quality of life they provide and the health expenses that patients avoid in the future.

"Curing hepatitis C will likely go on to prevent liver cancer, go on to prevent patients needing liver transplantation, go on to save health care dollars down the road," said Dr. Adam Peyton, a liver specialist at the University of Miami Health System in Florida, who prescribed $13.5 million worth of hepatitis C drugs in Part D last year. "It's upsetting that there's been so much negative publicity for such a positive breakthrough in medicine."

Still, the drugs may not save money for Medicare, even in the long run. A recent study in the Annals of Internal Medicine suggested that only about one-quarter of the $65 billion needed to pay for the new drugs for eligible patients (not just those on Medicare) would be offset by avoiding hospitalizations and other treatment costs. The vast majority of patients with hepatitis C don't go on to get liver transplants.

Federal taxpayers cover the preponderance of the cost of treating patients in Part D, but enrollees also have to pick up a share, which can vary based on their drug usage. Once a Medicare enrollee spends $4,700 out of pocket on drugs -- in this case, just a few days of a prescription -- "catastrophic" coverage kicks in. At that point, Medicare picks up 80 percent of the cost, the health plan pays 15 percent, and the patient pays the remaining 5 percent.

Some costs probably will be passed along to Medicare beneficiaries who don't have hepatitis C, in the form of higher deductibles and maximum out-of-pocket costs, said Jack Hoadley, a research professor in the Health Policy Institute at Georgetown University.

For example, next year the standard drug deductible in the program -- the amount a patient has to spend before coverage kicks in -- will increase to $360 from $320.

The out-of-pocket maximum, at which catastrophic coverage begins, is also going up to $4,800 from $4,700. Beyond that, insurance company premiums may also increase somewhat, though increases could be offset by changes in the use of other drugs. Rates have not yet been announced for 2016.

Sen. Bernie Sanders, a Vermont independent, has been a critic of the high price of the new drugs, particularly Sovaldi. "The cost of Sovaldi is not only an economic issue in terms of the impact of the cost of this drug on the VA, on Medicaid, on Medicare, it is a moral issue, and that is how many people in this country will suffer, how many will die very painful deaths because of the excessive costs of this particular product," Sanders said in a written statement to ProPublica.

This year an additional competitor has come on the market, the Viekira Pak made by AbbVie, giving insurance companies leverage to negotiate larger rebates in exchange for a spot on their preferred-drug lists. Those rebates can slice 40 percent to 50 percent off the list prices of the drugs.

The law that created Medicare Part D does not allow the government to negotiate rebates directly, but it allows the private insurance companies that administer the program to do so. Details on the rebates are confidential.

Gilead Sciences, the maker of Sovaldi and Harvoni, has defended its prices, saying they are fair given the value the drugs provide to patients. In a statement, the company said it has "established one of the most comprehensive patient assistance programs in the industry to help ensure cost is not a barrier to Sovaldi and Harvoni for patients in the U.S. with high co pays or who lack adequate insurance."

Medicaid experts acknowledge that anticipated legal challenges may compel state Medicaid programs to stop rationing the new drugs.

Many states have held back because they felt "held completely captive to [Gilead's] pricing," said Matt Salo, executive director of the National Association of Medicaid Directors. "There's a sense, it's pretty broadly shared, that that's not going to be a sustainable policy for long."

With the emergence of the new drugs, a new set of doctors has moved to the head of the list of Medicare Part D's top prescribers by dollar amount.

Dr. Bruce Bacon, a liver specialist at St. Louis University, will likely be ranked No. 1 for drug spending in Part D in 2014, federal data shows. He wrote 925 prescriptions for hepatitis C medications, costing $22 million. By contrast, the program's top prescriber in 2012 wrote 76,000 prescriptions that cost $10.5 million.

Bacon said he had no idea that his prescriptions cost Medicare so much money.

"I really don't think about the cost," he said. "I think about taking care of the patients. Should I not take care of the patients because the cost is expensive?"

Like many of the most prolific prescribers of the new drugs, Bacon has received speaking fees from Gilead Sciences and Janssen Pharmaceuticals, the maker of Olysio. He said he and many experts have relationships with several companies. "It doesn't make a difference at all" in prescribing, he said.

Medicare patients with hepatitis C recognize how much the drugs cost, but say the results have changed their lives.

Robert Serrano, 61, one of Peyton's patients, who said he is on Medicare because he is disabled, said Sovaldi cured him. He had a liver transplant in October 2008 but the disease had started to attack his new liver.

"It was a long road for me with this condition that I had and the medications," he said. "Now at least I'm able to cut grass and do the little things I didn't do in life. It's been a blessing."

This piece originally appeared at ProPublica, where Charles Ornstein is a senior reporter, and was co-published with the Washington PostProPublica data reporter Ryann Grochowski Jones contributed to this report. Use ProPublica's Prescriber Checkup tool to compare your doctor's prescribing patterns to others in the same specialty and state, or sign up for ProPublica's newsletter.

Solar Energy: A Buyer's Guide

Sheri Givens - March 30, 2015

In 2014, the solar industry installed 40 percent more physical generation sources than it had in the previous year. Today, in many states, consumers are producing their own energy at home through rooftop solar panels and selling the excess back to the power company, essentially changing the grid from a one-way street to a two-way power highway.

As these technologies become more widespread, we must ensure that consumers have accurate information and are protected from deceptive practices and bad actors. Electricity is ubiquitous, but that doesn't mean we all know where it comes from, how it enters our homes, how it's paid for, or the steps taken to ensure customer protection and safety.

As a first step toward addressing this problem, the Louisiana State University Agricultural Center has published a great new guide for those considering solar, to which I contributed. It contains exactly the type of education consumers, regulators, legislators, advocates, and solar industry stakeholders need.

Like any major financial commitment, the decision to go solar should not be made lightly. To begin with, consumers need to figure out if they have a rooftop location and climate appropriate for generating power. Then, they need to decide whether they want a system large enough to provide electricity for their entire home, determine whether they have the finances to outright purchase the system, and, if not, understand what third-party financing options are available to them. With some leases, payments continue at the same rate through the duration of the typical 20-year term; with others, payments might increase 2 to 5 percent each year. There are also many tax credits available.

Further, consumers need to know when (and if) their costs will be recouped during the term of the lease -- and understand how any electricity-bill savings are calculated by their solar provider. Solar panels do not necessarily place a home "off the grid," as traditional electricity may still be needed on cloudy days and during evening hours.

Other challenges homeowners might face include local ordinances or homeowners'-association rules that restrict solar panels to maintain an established aesthetic standard. Also, consumers leasing solar panels need to understand the required maintenance (e.g., tree trimming, cleaning), what happens at the end of their lease term (e.g., buy the panels, continue the lease, panel removal), and what is necessary for them to sell their home (e.g., buy out the lease term, have the buyer assume the lease if they have a high enough credit score to do so, move the panels to the new home if staying in the same utility service area).

Several states, including Arizona, Iowa, and Louisiana, are examining consumer-protection options to ensure rooftop-solar companies are transparent with their customers. For example, in response to an elderly couple's complaint of being locked into a 20-year solar lease and being unable to sell their home after moving into assisted living, Arizona state senator Debbie Lesko recently introduced legislation that would require companies to disclose the total price and full costs of rooftop solar panels.

Through consumer education -- and, if necessary, consumer-protection law -- we need to ensure that consumers have the facts they need to make effective decisions about solar energy. That is the best route toward an inclusive, renewable energy future.

Sheri Givens is the former executive director of the Texas Office of Public Utility Counsel, the state's consumer advocate for residential and small business electricity consumers.

High-Deductible Plans Bring Lower Costs Now,
But Will They Bring Pricey Problems?

Jay Hancock, Kaiser Health News - March 27, 2015

Got a high-deductible health plan? The kind that doesn't pay most medical bills until they exceed several thousand dollars? You're a foot soldier who's been drafted in the war against high health costs.

Companies that switch workers into high-deductible plans can reap enormous savings, consultants will tell you -- and not just by making employees pay more. Total costs paid by everybody -- employer, employee and insurance company -- tend to fall in the first year or rise more slowly when consumers have more at stake at the health-care checkout counter whether or not they're making medically wise choices.

Consumers with high deductibles sometimes skip procedures, think harder about getting treatment and shop for lower prices when they do seek care.

What nobody knows is whether such plans, also sold to individuals and families through the health law's online exchanges, will backfire. If people choose not to have important preventive care and end up needing an expensive hospital stay years later as a result, everybody is worse off.

A new study delivers cautiously optimistic results for employers and policymakers, if not for consumers paying a higher share of their own health care costs.

Researchers led by Amelia Haviland at Carnegie Mellon University found that overall savings at companies introducing high-deductible plans lasted for up to three years afterwards. If there were any cost-related time bombs caused by forgone care, at least they didn't blow up by then.

"Three years out there consistently seems to be a reduction in total health care spending" at employers offering high-deductible plans, Haviland said in an interview. Although the study says nothing about what might happen after that, "this was interesting to us that it persists for this amount of time."

The savings were substantial: 5 percent on average for employers offering high-deductible plans compared with results at companies that didn't offer them. And that was for the whole company, whether or not all workers took the high-deductible option.

The size of the study was impressive; it covered 13 million employees and dependents at 54 big companies. All savings were from reduced spending on pharmaceuticals and doctor visits and other outpatient care. There was no sign of what often happens when high-risk patients miss preventive care: spikes in emergency-room visits and hospital admissions.

The suits in human resources call this kind of coverage a "consumer-directed" health plan. It sounds less scary than the old name for coverage with huge deductibles: catastrophic health insurance.

But having consumers direct their own care also requires making sure they know enough to make smart choices like getting vaccines, but skipping dubious procedures like an expensive MRI scan at the first sign of back pain.

Not all employers are doing a terrific job. Most high-deductible plan members surveyed in a recent California study had no idea that preventive screenings, office visits and other important care required little or no out-of-pocket payment. One in five said they had avoided preventive care because of the cost.

"This evidence of persistent reductions in spending places even greater importance on developing evidence on how they are achieved," Kate Bundorf, a Stanford health economist not involved in the study, said of consumer-directed plans. "Are consumers foregoing preventive care?  Are they less adherent to [effective] medicine? Or are they reducing their use of low-value office visits and corresponding drugs or substituting to cheaper yet similarly effective prescribed drugs?"

Employers and consultants are trying to educate people about avoiding needless procedures and finding quality caregivers at better prices.

That might explain why the companies offering high-deductible plans saw such significant savings even though not all workers signed up, Haviland said. Even employees with traditional, lower-deductible plans may be using the shopping tools.

The study doesn't close the book on consumer-directed plans.

"What happens five years or ten years down the line when people develop more consequences of reducing high-value, necessary care?" she asked. Nobody knows.

And the study doesn't address a side effect of high-deductibles that doctors can't treat: pocketbook trauma. Consumer-directed plans, often paired with tax-favored health savings accounts, can require families to pay $5,000 or more per year in out-of-pocket costs.

Three people out of five with low incomes and half of those with moderate incomes told the Commonwealth Fund last year their deductibles are hard to afford. Many households simply lack the resources to make out-of-pocket health costs, shows a recent study by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the Foundation.)

As in all battles, the front-line infantry often makes the biggest sacrifice. 

This piece originally appeared at Kaiser Health News, where Jay Hancock is a senior correspondent. Kaiser Health News (KHN) is a nonprofit national health policy news service. 

Robert VerBruggen - March 26, 2015

There is no debating that, as in so many other areas, Americans are racially segregated when it comes to homicide. There is also no debating -- at least among people who are actually familiar with the numbers -- that homicide is especially concentrated in the black population. The FBI reports that in 2010, a year in which whites outnumbered blacks six-to-one in the population at large, there were nearly as many black-on-black homicides as white-on-white homicides: 2,459 vs. 2,777. Interracial killings paled in comparison; there were 447 black-on-white homicides and 218 white-on-black homicides.

By contrast, what to do about this problem is hotly debated. Some say aggressive "Broken Windows" policing and increased incarceration have helped to bring homicide down over the past two decades. Others, even some who concede these strategies can work up to a point, see cops and prisons as a threat to black lives rather than as a protector of them, saying the only acceptable way to reduce homicide is to address its root causes or rehabilitate criminals.

LA Times journalist Jill Leovy, in her highly impressive and exhaustively reported new book Ghettoside, presents a very different idea. She notes that, through most of American history, blacks have been denied the protection of the law -- killing a black person has come with little official consequence, signaling that black lives do not matter and leaving vengeance in the hands of the victims' allies. Even today, she writes, "like the schoolyard bully, our criminal justice system harasses people on small pretexts but is exposed as a coward before murder." The solution is more police activity -- focused on solving homicides, not preventing them. Only then will these communities view the state as having a legitimate monopoly on the use of force, cede the task of retaliation to the law, and cooperate with police investigations.

Leovy carefully infuses a true-crime page-turner with the numbers and historical backdrop that are required to understand it. She tells the tales of Bryant Tennelle, a murdered black teenager and the son an LAPD detective, and of John Skaggs, the white Republican super-investigator who doggedly tracks down the victim's killers. Her storytelling is superb, and her command of homicide statistics and the history of African-American violence is downright intimidating. Those of us focused on policy, however, will wish she spent more space giving her theory the modern-day empirical support it deserves.

Certainly, the theory has much to recommend it. The idea that Leviathan's justice system can supplant humans' natural tendency toward cycles of revenge killings can be traced all the way from Thomas Hobbes's thinking in the 17th century to Steven Pinker's stunning 2011 book The Better Angels of Our Nature. Pinker convincingly argued that the rise of government contributed to a centuries-long decline of violence, and he even mentioned the possibility that a lack of legal protection incubated black crime in America. Scholars Leovy cites -- including William J. Stuntz, Eric H. Monkkonen, and Randall Kennedy -- have similarly posited that various forms of "underenforcement" have plagued black communities since the days of slavery and Jim Crow and remain a major problem today. It is eminently plausible that if every homicide were investigated by someone as determined as John Skaggs, poor black neighborhoods would be safer and less distrustful of the police.

But many readers will finish the book wanting direct answers to two basic questions: In the context of today's America, do improved homicide solve rates actually reduce future homicides? And if so, is this really because communities come to rely on the law, or is it simply because solving homicides locks up some murderers and deters others? Leovy doesn't address these issues head-on, so I set out in search of answers elsewhere.

Testing the theory involves more than just raw clearance rates, of course. Leovy writes that segregation is a key factor too -- it's how, she explains, "relatively modest differences in homicide clearance rates by race produce[] such disparate outcomes." This is important, because the racial gap in clearance rates is indeed modest: An extensive investigation several years ago by the news organization Scripps found that 78 percent of cases with white victims were cleared, compared with 67 percent of cases with black or Hispanic victims. Scripps also found evidence of abysmal performance in cities with poor black enclaves, though -- rates went as low as the 20s and 30s in Chicago, Detroit, and New Orleans -- and Leovy says clearance rates are around 40 percent in the areas of L.A. she covered.

One would think, in our increasingly data-driven crime debate, that the stats wizards would be running numbers left and right to see whether, all else being equal, low clearance or arrest rates -- especially very low rates in poor, segregated areas -- are associated with higher future crime. Unfortunately, there are relatively few studies taking this approach, many of which are decades old, and I have not found any that explicitly take segregation into account. To make matters worse, few have tried to disentangle the effects of deterrence, incapacitation, and greater deference to the rule of law.

A late-1970s study of Houston did find that clearance reduced homicide, though it also found boosting clearance rates to be very labor-intensive. A study of eight cities in the 1990s found that higher clearance rates in one year predicted lower homicides in the next, both in the overall data and in three of the cities studied individually, all heavily black -- Atlanta, D.C., and New Orleans. (There was also a statistically significant effect in Richmond and Miami, but not Atlanta, when clearance rates and homicide rates in the same year were compared.) A 2001 Heritage Foundation analysis focused on violent crime in general found an effect from clearances as well.

However, a 1982 study found no persistent link between clearance rates and murder. Results were also mixed in a Steven Levitt paper from the late 1990s; murder was the only crime for which arrests weren't consistently tied to lower rates (see Table IV). And a late-2000s study of 20 cities from the St. Louis Fed found an inconsistent relationship between murder arrests and murder rates too -- though the one city where there did seem to be a strong relationship was New Orleans.

In addition, the Scripps report singled out a few cities for improving their clearance rates or watching them deteriorate between the 1990s and the 2000s. The Justice Department has murder-rate data for Durham, N.C., and Santa Ana, Calif., places where rates improved dramatically, as well as for Flint, Mich., and Dayton, Ohio, where the opposite happened. Here are those cities' murder rates divided by the nationwide rate since 1990 (it should be noted that Santa Ana, which is overwhelmingly Hispanic, has a very low black population):

One shouldn't make too much of this, given how weak some of the trends are and the host of other problems Flint is dealing with, not to mention all the more mundane questions of correlation and causation. Combined with some of the evidence above, however, it bolsters the case that this topic deserves a lot more study. One promising approach would be to fund a pilot program in a few segregated, low-clearance cities and carefully monitor the effect it had on crime and community relations -- not just on the clearance rates themselves.

In the meantime, though, readers should be wary of Leovy's dismissive attitude toward preventive policing. She never offers a compelling case against it, and it's entirely possible to pursue preventive and reactive strategies simultaneously. Frankly, the evidence for Broken Windows reducing crime, while disputed, is much more compelling than the evidence for improved clearance rates' doing so. Both New York City and Leovy's L.A. experienced notable crime drops during the tenure of police chief Bill Bratton, the world's leading Broken Windows practitioner, and even the decidedly left-leaning researchers at the Brennan Center say that some preventive practices (such as putting more officers on the street and using the computer program CompStat to deploy them where they're needed most) can reduce crime.

With Ghettoside, Jill Leovy has given readers not just a gripping story, but also an important theory with a solid historical grounding. The nation's number-crunchers should give Leovy's ideas the thorough vetting they deserve.

Robert VerBruggen is editor of RealClearPolicy. Twitter: @RAVerBruggen

What if Congress Won't Do Its Job?

Cameron Smith - March 24, 2015

The U.S. Constitution is abundantly clear about which branch of the federal government creates our laws: "All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives." But what the Constitution makes simple, Congress and the president have turned into a hot mess.

Lately, Congress has assailed the president for essentially writing law on his own. Congress is right: From immigration to environmental regulation and even health care, Barack Obama has used a combination of regulation and executive action to achieve his policy objectives. He even has gone so far as to take military action under the suspect legal authority of a congressional authorization of force from 2001.

Recent presidents have argued, however, that what appears to the public as unilaterally writing law is simply presidents' using the fullest extent of their delegated power to respond to the issues of the day. And they're right in a way, too: Over the course of several decades, Congress has shifted an immense amount of its constitutional law-writing authority to the president and federal agencies. The House and Senate seem perfectly content to complain about the president exceeding his constitutional authority while doing precious little to exercise their own.

The shift has been subtle but significant. Add one agency here. Delegate rulemaking authority there. Bring in some creative legal reasoning. Pretty soon, you have our current regulatory state, where bureaucrats use decades-old congressional authority to draft what amounts to new law.

Delegated congressional authority is substantively different than the executive branch's responsibility to ensure that laws are faithfully executed. Purely administrative action is well within the president's power. Developing new substantive provisions of law, crafting arbitrary exemptions to laws, and ignoring deadlines and details clearly laid out in properly enacted laws are not.

As my colleague Kevin R. Kosar writes in a new paper, the REINS Act, introduced in the current Congress by Rep. Todd Young (R., Ind.) and Sen. Rand Paul (R., Ky.), is just one way that Congress could take back its constitutional responsibility. The legislation would require Congress and the president to affirm major federal rules -- those with an economic impact of $100 million or more -- before such rules could be enforced. Congress would not be forced to write the rules itself; it would simply become accountable for the exercise of its authority.

Unfortunately, Congress is not clamoring to pass the REINS Act. At this point, Americans need to ask themselves: Do senators and congressmen really have any interest in the arduous task of writing law, or would they rather talk about it? We hear so much about executive overreach, but what about legislative underreach? What if the biggest problem is not the president, but rather a complete unwillingness of Congress to develop or be accountable for positive ideas to address the challenges our nation faces?

The issue is not simply with Republicans. When Democrats most recently controlled Congress, they drafted the Affordable Care Act to look like a Mad Libs game, with the Health and Human Services secretary directed to fill in the blanks as she saw fit. Then-speaker Nancy Pelosi's preference -- to pass the bill to find out what was in it -- was a complete abdication of law-writing responsibility.

The REINS Act should have been one of the first bills the Republican Congress put on the president's desk. The measure is not about attacking the president; it is about Congress being serious about its constitutional charge. Instead, we have watched Congress try to undo the president's actions under authority Congress gave away long ago. Congress is not trying to take its authority back from the president. Instead, our senators and congressmen are saying: "We have no plans to use our authority, but we really do not want the president doing anything with it, either."

The Constitution rejects a president that both writes the laws and executes them, but it also expects a Congress willing to do its job. Until Congress demonstrates a willingness, through legislation like the REINS Act, to be accountable for the laws that affect the American people, talk of separation of powers and overreach by the president is little more than empty political rhetoric.

Cameron Smith is southern region director and senior fellow at the R Street Institute, a free-market think tank based in Washington, D.C.

Beyond Free Trade vs. Protectionism

Michelle Wein - March 23, 2015

There was a glimmer of hope as the year began that President Obama and Congress might be able to find common ground on trade policy, if on nothing else. In his State of the Union address, the president trumpeted his plan to conclude an ambitious new market-opening agreement, the Trans-Pacific Partnership (TPP). Meanwhile, House Ways and Means Committee chairman Paul Ryan, a leading steward of Republican trade policy, committed to pressing forward with legislation to give the president "trade promotion authority," meaning that any deal would be guaranteed a simple up-or-down vote in Congress.

But policymakers will need to suppress more than mere partisanship if they are going to make progress on trade. They must also contend with two influential camps of economic ideologues that have long thwarted constructive debate. On one side are neoclassical free-traders who would happily accept any market-opening deal presented to them, no matter how little it did to confront foreign mercantilist practices. On the other side are neo-Keynesian protectionists who reflexively suspect every trade pact to be at best little more than a bill of goods and at worst a speed ramp for imports and lost U.S. jobs. Together, these old foes are amazingly accomplished at turning any civil conversation about trade policy into a heated and unproductive argument.

Those in the neoclassical camp believe in unrestricted free trade, even if it is one-sided -- our markets open and fair, theirs closed and discriminatory -- because they believe whatever is lost from ceding an industry's production in America is made up for by lower import prices. These neoclassicalists find their homes in leading think tanks in D.C. and university economics departments around the nation. They exert influence by producing report after report arguing that the trade deficit is a mere accounting fiction and that America as a whole simply cannot lose from trade.

Neoclassicalists shrug about losing specific industries to foreign competition (whether said competition is fair or unfair) because they think any industry we lose isn't one where we have a comparative advantage anyway. Kenneth Green, a scholar at the American Enterprise Institute, has written that "as long as China is selling us the products we need, the location of the manufacturing isn't really that critical for the economy." But in their single-minded embrace of free trade based on inherent comparative advantage, neoclassicalists blithely ignore the competitive advantage a country gains when it develops skills or capabilities that allow it to increase its global market share in high-wage, high-value-added sectors.

On the other side of the fence, neo-Keynesians deeply distrust globalization because they see it as a race to the bottom for wages and regulatory protections. They would prefer the United States not enter into any new trade agreements and instead focus on rolling back existing ones. Neo-Keynesians find their homes in consumer-advocacy organizations such as Public Citizen and think tanks such as the Economic Policy Institute. They lobby officials with the message that trade agreements like the TPP kill American jobs for the sake of corporate profits.

Perhaps no one articulates the neo-Keynesian perspective better than Nobel Prize-winning economist Joseph Stiglitz, who recently argued in Project Syndicate that "the negotiations to create a free-trade area between the U.S. and Europe, and another between the U.S. and much of the Pacific ... are not about establishing a true free-trade system. Instead, the goal is a managed trade regime -- managed, that is, to serve the special interests that have long dominated trade policy in the West." But in their deep and abiding distrust of corporate interests, neo-Keynesians fail to recognize that what's good for GM is still at least somewhat good for the U.S., and that open markets encourage innovation and progress by allowing firms to gain global scale while allowing nations to specialize in key industries.

At the end of the day, the neoclassical-versus-neo-Keynesian trade argument is doomed to run in circles. If we want to break the cycle and make progress, we need to move beyond tired old dogmas and embrace a new understanding of trade and globalization grounded in what we at the Information Technology and Innovation Foundation call "Innovation Economics." This doctrine recognizes that the key goal of trade is not to boost short-term worker or consumer welfare, but to drive innovation and productivity by producers in the United States. It argues that a rules-based, global trading system can benefit everyone, but only as long as there are mechanisms in place to ensure everyone plays by the rules.

In the 21st-century knowledge economy, this means agreements that allow for effective intellectual-property enforcement and prohibit new mercantilist practices (such as forced technology transfer, data-residency requirements, and standards manipulation). It also means our nation should neither be indifferent to its industrial mix nor try to preserve its existing mix indefinitely. Rather, trade policy should be a means to drive U.S. global competitiveness in the knowledge-based industries of the future. In other words, computer chips are more important than potato chips.

President Obama and Republican leaders in Congress do have an opportunity to make great progress this year on trade. But to gain the support they need, they must persuade forward-looking lawmakers in their respective parties to embrace new thinking about trade.

Michelle Wein is a trade policy analyst with the Information Technology and Innovation Foundation and co-author of the report "The Intellectual Basis of U.S. Trade Policy Trench Warfare."

It's Time for Real Competition in Solar Markets

Lori Sanders, R Street - March 23, 2015

Fights are playing out across the states as regulators try to navigate the introduction of rooftop solar into energy markets.

Over the last few years, numerous pieces of legislation have been introduced, and some have passed, intended to address utility companies' concerns over grid reliability in the face of dwindling customer demand. A recent article in the Albuquerque Journal raises new allegations, lambasting solar companies for irresponsibly fleecing consumers, painting rooftop solar as a foolhardy investment intended to suck homeowners dry while lining the pockets of solar executives.

Frankly, the risks inherent in solar contracts are no different than risks in other long-term contracts. Any long-term financial commitment deserves careful scrutiny on the part of the consumer. Obviously, regulators should put rules in place to root out fraud. Should solar companies be held accountable for offering clear contracts? Yes. But should consumers also be expected to do due diligence when engaging in a large investment? Also yes. In the end, purchasing rooftop solar is in no way a uniquely dangerous transaction that deserves a higher level of attention.

The troubling portion of the solar industry is government favoritism, whether in the form of subsidies, tax credits or regulations mandating solar's use. Utilities have spent years crying foul, pointing out the ways they've invested over time to provide reliable power in a highly regulated environment, only to be upset by a new power source made competitive by incredibly generous subsidies. But the truth is more complicated. Utilities enjoy a broad variety of state supports and have enjoyed the benefits of being a government-granted monopoly. It's high time that competition came to the energy sector, ending subsidies and favorable treatment for everyone.

Utilities have a legitimate concern that increased rooftop solar will undermine grid reliability, increasing prices for consumers. Regulators should take this issue very seriously and work to find a solution that ensures access to power while still allowing competition. Unfortunately, rather than dealing with the actual root issue, states are pursuing a variety of paths to limit solar's implementation, erecting barriers to entry, prohibiting certain financing mechanisms or imposing arbitrary fees.

It's regrettable that solar is subsidized, but the answer isn't to make further regrettable decisions out of spite. We should work to end all energy subsidies, while regulators address the true problems, like ensuring grid reliability.

Lori Sanders is outreach director and senior fellow at the R Street Institute. This piece originally appeared on the institute's blog.

Abortion vs. Sex Trafficking in Albany and D.C.

Ben Johnson - March 20, 2015

When it comes to the politics of human trafficking, the Democrats in Washington could learn a lot from the Democrats in Albany. New York Democrats -- a phrase that hardly bespeaks moderation -- have seen the results of denying aid to modern-day slaves over abortion, and they are fleeing in retreat.

In the U.S. Senate, Democrats recently brought a vote on the Justice for Victims of Human Trafficking Act to a screeching halt because an obscure provision would restrict abortion funding. As it turns out, it would affect a minuscule amount of money. Since the language, which is based on the Hyde Amendment, contains a rape exception -- and since sex-trafficking victims are rape victims -- these "limitations on spending wouldn't have anything to do about the services available under this act," as Sen. John Cornyn (R., Texas) said on the Senate floor this week.

The bill applies the Hyde Amendment to victim-compensation fees taken from traffickers, and not merely taxpayer subsidies, which does represent a further restriction -- albeit of the most modest kind. Theoretically, it could deny abortion funds to labor-trafficking victims or those who become pregnant through consensual sex. This tiny risk to a fraction of Planned Parenthood's bottom line caused Democrats to launch a filibuster and -- with four notable exceptions -- to vote against cloture on Tuesday.

Seeing Senate Democrats filibuster a bill to fight human trafficking over abortion, state legislators in New York must have thought they were watching Groundhog Day. One day earlier, they had brought their own two-year-long abortion battle to an end.

In 2013, New York governor Andrew Cuomo proposed the Women's Equality Act, a ten-point plan that included commonsense proposals for human trafficking, domestic violence, and discrimination against pregnant women. It also contained the largest abortion expansion in state history -- eroding restrictions on late-term abortion, allowing non-physicians to perform abortions, and forcing religious hospitals to violate their conscience or lose state funding.

"I see it almost as a bill of rights," Governor Cuomo said as he unveiled the legislation, refusing to abandon the abortion plank. "We don't believe you have to give up any of the ten." The Democrats who control the state assembly insisted the package had to be adopted en masse, holding up nine bills aimed at improving women's lives because the Senate's Republicans and Independent Democrats would not endorse the abortion language.

The state Senate, led by Republican Dean Skelos, blocked the abortion bill for two years, questioning whether expanding abortion access was necessary in the state with the highest abortion rate in the nation. The anti-trafficking act's sponsor, Democratic assemblywoman Amy Paulin of Scarsdale, asked that her bill be allowed to pass as a standalone measure but was repeatedly denied. All the while, women suffered.

The standoff held until Assembly Speaker Sheldon Silver (D., Manhattan) was arrested in January for taking nearly $4 million in bribes. His replacement, Democrat Carl Heastie, finally allowed the chamber to vote on the bill that would stiffen penalties against human traffickers. The state assembly passed it unanimously on Monday. Even Cuomo says he supports the decision to address "an injustice that simply cannot be allowed to continue in New York."

How things have changed. Just last year, Cuomo and Lt. Gov. Kathy Hochul were so invested that they created a Women's Equality Party ballot line to promote the act, abortion provision and all. Cuomo's reversal is a sign of how quickly the "war on women" theme could implode. In 2014, those most fixated on gynecological politics -- from Wendy Davis to Sandra Fluke, and Mark Udall to Martha Coakley -- went down in flames.

Failing to help sex slaves is doubly egregious, not to mention politically unwise. America brims with compassion for human beings being sold to the highest bidder, and the vast majority of Americans oppose taxpayer funding of abortion. Polls show anywhere from 58 percent to 72 percent of Americans oppose taxpayer-funded abortion -- with women more opposed than men in the most recent Marist poll. If anything, the Hyde Amendment -- passed by a Democratic Congress and signed by a Democratic president -- is not restrictive enough, because in some circumstances U.S. taxpayers can still be compelled to underwrite abortions.

Either way, Planned Parenthood's empire is hardly imperiled. President Obama has turned the spigot of taxpayer funding into a fiscal fire hose. Cecile Richards's $400,000 salary remains secure -- which is far more than can be said for today's indentured servants.

After two years of political warfare, New York Democrats have admitted that holding human-trafficking victims hostage for the billion-dollar abortion industry is a losing proposition. Isn't it time for Washington Democrats to follow their lead?

Ben Johnson is U.S. bureau chief of His personal website is

Paul Thomas, The Conversation - March 20, 2015

Although re-authorization is still politically complicated, 2015 appears to be the year the Elementary and Secondary Education Act (ESEA) will be reformed.

Popularly known as No Child Left Behind (NCLB), ESEA promised to close the achievement gap and herald an era of evidence-based education policy by giving federal teeth to a state-based accountability process launched in the early 1980s. However, NCLB not only failed to accomplish these goals, but also led to some schools resorting to cheating, so as to increase test scores.

Starting in 1984, I taught for 18 years in a South Carolina public school. For the past 13 years I have been a professor of teacher education. Throughout these 30-plus years, I have witnessed how accountability based on standards and high-stakes testing has guided how we view and run schools.

My experience and analysis of education policy during that time have revealed important lessons from NCLB -- ones likely to be ignored during the re-authorization process. Education reform under the Obama administration and the initial plans for re-authorization show that politicians continue to support standardized testing as part of accountability policies, despite a long record of failure.

U.S. Education Policy Has Been Guided by 'Miracle' Claims
Throughout the 1990s and into the 2000s, "miracles" in education reform have significantly influenced US education policy. NCLB, for instance, was built on bi-partisan support for George W. Bush’s self-proclaimed Texas "Miracle."

The "miracle" under Bush suggested that accountability based on standards and high-stakes testing raised student achievement and solved some long-standing educational challenges, such as drop-out rates and achievement gaps.

However, scholars have raised questions about the "miracle." Emeritus professor at Boston College, Walt Haney, who analyzed the Texas reform, concluded:

The gains on TAAS (Texas Assessment of Academic Skills) and the unbelievable decreases in dropouts during the 1990s are more illusory than real. The Texas "miracle" is more hat than cattle.

Despite ample evidence and expert opinion, such "miracle" reforms continue to drive policy even under Obama. Before becoming secretary of education in the Obama administration, Arne Duncan was credited with improving student pass rates in Chicago, another so-called education "miracle."

Early in his administration, Barack (and Michelle) Obama endorsed the Harlem "miracle" that claimed enormous gains at Harlem charter schools. Yet, both "miracles" have been called into question.

Testing Pressures Have Led to Corrupt Practices
In addition, NCLB has created several negative consequences.

For example, the pressure of accountability to meet unattainable goals such as 100% proficiency has resulted in cheating in order to raise test scores. High-profile cases have occurred in Atlanta and Washington DC.

Also as detailed by an academic, Andre Perry, testing pressures under NCLB led to corrupt practices in public and charter schools that were exposed in New Orleans. As Perry stated in his analysis, "the desperation to show growth can lead to nefarious practices like counseling out [identifying students likely to score low on tests and recommending they leave a school]" or even excessive expulsion and suspension.

The focus on raising test scores led to other negative consequences as well -- such as a increasing the emphasis on core courses while also eliminating electives such as art and even more teaching for the test. As a result, expectations for students were also narrowed.

A final consequence was a booming education marketplace. UK-based Pearson "has reaped the benefits," as Stephanie Simon reports: "Half of its $8 billion in annual global sales comes from its North American education division." A Software & Information Industry Association report reveals that testing and assessment products -- which include software, digital content and related digital services -- have increased by 57% since 2012-2013. They now make up the largest single category of educational technology sales.

NCLB Fails to Close the Achievement Gap
Most important of all, NCLB has failed its most ambitious goals, including closing the achievement gap and ushering in evidence-based policy.

Based at UCLA and founded to deepen understanding of racial and ethnic groups in the United States, the Civil Rights Project and FairTest, a program that works to end the misuses and flaws of standardized testing, after a careful analysis of National Assessment of Educational Progress (NAEP) data, reveal that the achievement gap, which appeared to be closing before these accountability measures, has become stagnant over the last two decades:

Further, we must ask: Have NCLB legislation and funding led to more evidence-based policies? Often not.

Notably, value-added methods (VAM), a complex statistical method to interpret test data, is used as a tool for holding teachers accountable for student test scores. A study for the Educational Testing Service warns that this policy is unreliable for individual teacher evaluations and will discourage teaching high-needs students.

Education Policy Needs to Focus on Equity
Also, accountability measures have allowed for policies that let states take over districts or schools labeled "failing." However, close analysis of schools that were taken over did not show significant student achievement. In fact, such policies often disenfranchise students and communities.

In my view, throughout the NCLB era, evidence has been consistently trumped by partisan politics.

Ultimately, the real lessons of NCLB are that accountability based on testing is not the solution to educational problems that are grounded mostly in rising poverty.

Education policy focusing on equity, community, and support would serve our students and schools well -- and not the political and commercial interests that have benefited so far from the ineffective and harmful NCLB.

Paul Thomas is an associate professor of education at Furman University. This article was originally published on The Conversation. Read the original article.

Three Prescriptions for Better Health Care

Dana Williams - March 18, 2015

The Supreme Court recently heard oral arguments in King v. Burwell, another case involving the Affordable Care Act (a.k.a. "Obamacare"). If the Court decides that the law's words mean what they say, then federal subsidies for individuals will be available only in states that have established insurance exchanges. For those who live in the 36+ states that have chosen not to set up their own exchanges, this presents a problem.

First the ACA makes insurance more costly by imposing mandates on insurers. Then it requires everyone to buy this artificially expensive product. Many believe the subsidies were an attempt to entice states to set up their own exchanges -- if they did so, they could shift some of this artificially high cost from state consumers to federal taxpayers (never mind that they are one and the same). But if the Court rules against the government, consumers in many states will face higher insurance costs without the benefit of taxpayer support. This means that it will fall to state leaders to find new ways to reduce the costs of health care.

Liberals, conservative, and libertarians agree on the goals: Patients should have access to innovative, low-cost, and high-quality care. And though another round of federal reform may be years off, a number of state-level changes can move us closer to a competitive and patient-centered health-care market, making it possible to realize these shared aspirations.

In a new paper published by the Mercatus Center at George Mason University, we identify three areas for reform: States can eliminate certificate-of-need laws, liberalize scope-of-practice regulations, and end the regulatory barriers to telemedicine.

Certificate-of-need (CON) laws, found in 35 states and the District of Columbia, require individuals looking to open a new health-care facility or expand an existing facility to first obtain permission from a regulator. To do so, they must prove to the regulator that their community "needs" this additional service or facility. Although CON laws were originally intended to minimize costs to Medicare and Medicaid by limiting duplicative procedures, the balance of evidence suggests that these laws fail to contain costs and, by restraining competition, may actually increase costs.

The CON approval process is ripe for anti-competitive manipulation. It allows incumbent providers to testify against their would-be competitors, and statutes often direct regulators to explicitly protect the established facilities. CON laws create formidable barriers to entry. In Virginia, one doctor spent five years and $175,000 navigating the CON approval process trying to add a second MRI machine to his office. If CON laws increase costs and are prone to protect entrenched interests, why do they continue?

One reason is that many well-meaning supporters believe CON laws encourage additional care for the needy. But the evidence suggests this isn't true. Recent research by George Mason University economist Thomas Stratmann and Ph.D. student Jacob Russ finds that CON laws are associated with fewer hospital beds and MRI services, and they don't correlate with increased access to care for the needy. Allowing providers to enter and expand their operations without first asking the permission of their competitors' friends would be a first step toward a more competitive and patient-centered health-care market.

States can also reform scope-of-practice laws. These regulations, which differ from state to state, limit the tasks nurses, nurse practitioners, physicians' assistants, and many other health-care providers may undertake when caring for patients. They are said to protect consumers, but evidence suggests they protect certain medical-care providers from competition and fail to improve health quality. Limits on scope-of-practice constrict the supply of health care and contribute to the shortage of primary-care providers in the United States.

A recent National Bureau of Economic Research study analyzed the effects of scope-of-practice regulations on a variety of dimensions including wages, employment, costs, and the quality of medical services. The authors found that restrictive state regulations on nurse practitioners increase the cost of a well-child exam by about 16 percent, and have no discernible effect on outcomes such as infant mortality or malpractice premiums. These findings are consistent with those of previous research. A state that liberalizes its scope-of-practice regulations can expect its citizens to pay lower costs for better access to health care.

A third promising reform would be to remove the regulatory barriers to telemedicine. Telemedicine is an emerging innovation that uses technology to remotely diagnose, treat, and monitor patients. It promises to allow patients better access to high-quality care with greater efficiency. While technology has changed the way many other industries -- from retail to air travel -- deliver their services, our colleague Robert Graboyes shows that such convenient and cost-saving changes largely bypass health care.

Telemedicine may change this, but many states have policies standing in the way. Some, for example, require doctors to perform in-person examinations before writing prescriptions; others won't allow a diagnosis without an in-person visit; and still others discriminate against out-of-state providers. States should remove these barriers and allow the benefits of telemedicine to expand the options for delivering care.

Health-care policy should be about patient needs, not about politics. While federal reform is hopelessly politicized, states have a unique opportunity to make meaningful change to the way health care is provided. We recommend states focus on repealing certificate-of-need laws, easing restrictions on scope-of-practice, and removing barriers to telemedicine. Seizing this opportunity for change will allow competitive forces to bring innovation to health care and put patients first.

Matthew Mitchell is a senior research fellow and director of the Project for the Study of American Capitalism with the Mercatus Center at George Mason University, where he is also an adjunct professor of economics. Anna Mills is a second-year MA student in the economics department at George Mason University and a Mercatus Center MA fellow. Dana Williams is a second-year MA student in the economics department at George Mason University and a Mercatus Center MA fellow. All three are coauthors of recent research published by the Mercatus Center, "Three Prescriptions for States to Improve Health Care."

Kay S. Hymowitz - March 17, 2015

Are the poor victims of an unjust economy or of self-destructive cultural norms? New York Times columns by David Brooks and Ross Douthat, the 50th anniversary of the Moynihan Report on the black family, and the publication of Our Kids, a book by Robert Putnam that is sure to supplant Thomas Piketty's Capital as the inequality manifesto du jour seem to be reigniting that familiar debate.

The new Brookings Institution study "Sex, Contraception, or Abortion: Explaining Class Gaps in Unintended Childbearing" sure looks like evidence for the first premise. And its conclusion -- that poor women have more unplanned children than affluent women in large part because they can't afford, and have less access to, contraception and abortion -- will make intuitive sense to a lot of people.

But as is often the case when the subject is sex, common sense is beside the point. Plenty of evidence not covered in the Brookings report shows poor women to be considerably more adaptable than an economic or "structural" theory would allow.

The researchers, Richard V. Reeves and Joanna Venator, based their conclusion on one year of national survey data on 3,885 single women between 15 and 44 who were not trying to get pregnant. Dividing the women into five income groups, they found little difference in sexual activity. They also discovered no significant gap in how women felt about a possible pregnancy. At all income levels, the large majority -- between 65 and 72 percent -- said they would be upset if they got pregnant, though, perhaps surprisingly, close to 30 percent of women, from rich to poor, said they wouldn't mind.

However, the women differed in two crucial ways. First, lower-income women were two times as likely not to use contraception and three times as likely to become pregnant. Second, higher-income women were far more likely to abort an unplanned pregnancy. Higher-income women terminated 32 percent of their pregnancies; for poor women, the number was 9 percent.

The authors acknowledge that poor and well-to-do women might have differing attitudes about abortion. They also nod toward the idea, most fully brought to life in Kathy Edin and Maria Kefalas's landmark Promises I Can Keep, that poor young women find more fulfillment in motherhood. But they underline economic disadvantage as a cause of the unplanned-baby gap, and reasonably enough propose more funding for contraception and abortion.

Still, their argument remains at odds with a lot of other evidence about poor women's choices. For one thing, despite their hardship, disadvantaged women still have far more abortions than better-off women; poor and low-income women get close to 70 percent of all abortions. That fact, unmentioned in the Brookings report, may seem inconsistent with its findings, but it's not. Affluent women are more likely to terminate a particular unplanned pregnancy, but because poor women become pregnant at far higher rates, they have more abortions overall. Moreover, about half of all women getting abortions have had at least one previously; many if not most of them are low income.

One way of examining the question of whether hardship is at the root of the unplanned-baby gap is to ask whether locales with more publicly funded family-planning clinics have less unplanned pregnancy. Guttmacher estimates the percentage of the need for publicly funded services that is met in each state and the number of women per 1,000 who have unplanned pregnancies. But as the scatterplot below shows, there is no solid relationship between the two. Alaska and California outperform other states in terms of servicing needy women: About 60 percent of the need for publicly funded care is met. The states' unintended-pregnancy rates, though not the highest in the nation, are still impressive: 50 out of every 1,000 women. That’s about the same as a number of states, including Arizona, Ohio, and Illinois, that are only helping about 20 percent of the women who need it. That sure makes it look like money and access by themselves cannot explain the unplanned-pregnancy gap

The structural theory does seems to work better when it comes to abortion. (To get motive off the table, disclosure seems useful in these discussions: I am in favor of legalized abortion.) Guttmacher ranks all of the states by teen pregnancy, birth, and abortion rates; since the vast majority of teen births are unplanned, we can draw some conclusions about how much abortion reduces overall unplanned pregnancy. In general, as seems logical, women in states where abortions are relatively common have fewer unplanned babies. New York ranks 11th in teen pregnancy, but it sits way down at 43rd in teen births; the fact that it has the highest abortion rate of all 50 states surely explains that difference. Conversely, some states where anti-abortion feelings run especially high, like Louisiana, Arkansas, and Mississippi, have very low abortion and very high birth rates.

But it’s worth noting there are states that have low birth rates without high abortion rates. These tend to be low-poverty states where fewer teens get pregnant to begin with: South and North Dakota, Wisconsin, Iowa, Vermont, New Hampshire, Minnesota, and Nevada rank low on both metrics.

But that hardly means more abortion is the only way poor women will have fewer unplanned children. Fertility rates declined across the board between 2008 and 2011, but they dropped markedly more among high-school dropouts, who are generally the poorest of the poor. The least educated women experienced a dramatic 17 percent drop in fertility. That's compared to 1 percent among women with a BA or more. Note also that between the recessionary years of 2008 and 2011, the abortion rate declined 13 percent. In this case, poor women were able to avoid pregnancies because of hardship, not in spite of it. This is precisely the opposite of what the structural theory would predict.

The amazing decline in teen-pregnancy rates offers another good counterexample to economic theories. Almost all teens who have children are poor. Yet between 1990 and 2010, through both bull and bear labor markets, teen births declined by over 50 percent. During the same period that teen pregnancy was in a freefall, the abortion rate among teens was plummeting by 64 percent.

How did this utterly unexpected shift happen? Here’s one possibility we might consider: By the 1990s, a growing consensus was taking hold that teen motherhood was just a really bad idea. "If you took a 15-year-old with a child, but put her in a clean apartment, got her a diploma, gave her the hope of a job, that would change everything," then governor Mario Cuomo was comfortable saying in the 1980s. By the mid-'90s, a smart politician like Cuomo would never say such a thing. Could it be that teens were becoming alert to changing cultural norms about teen motherhood? After all, even while teens were having so many fewer unplanned babies during those years, their twentysomething older sisters were having more.

Unplanned childbearing plays a role in creating the inequalities that so trouble the minds of Americans today. "Since unintended childbearing is associated with higher rates of poverty," the Brookings authors write, "less family stability, and worse outcomes for children, these gaps further entrench inequality ... to close the gaps, we must first understand them."

They're right. But we’ll need to move beyond economic theories to do that.

Kay S. Hymowitz is a contributing editor of City Journal, the William E. Simon Fellow at the Manhattan Institute, and the author of Marriage and Caste in America: Separate and Unequal Families in a Post-Marital Age.

Our Kids' Growing Opportunity Gap

Reuben Thomas Finighan, The Conversation - March 17, 2015

On rare occasions, a book frames an issue so powerfully that it sets the terms of all future debate.

Robert Putnam's Our Kids: The American Dream in Crisis may do just this for the growing gulf between America's rich and poor.

I was a member of Putnam's research team for Our Kids during my studies at the Harvard Kennedy School, where Putnam is a professor of public policy -- so I can offer some insights into the research, and explain why the team is optimistic about its impact.

Our Kids is woven from two very different strands of research: part hard data-crunching, part ethnography.

One part of the team analyzed immense longitudinal datasets to draw out novel insights, then synthesized these with existing research. Another part of the team traveled across the country to bring this data to life through detailed, and often disturbing, first-hand accounts of the lives of Lola, Sofia, Elijah and another dozen of America's children.

What the research reveals is a country dividing in two. Children in wealthy families have access to more opportunities than ever before, while children in working-class families are thwarted by mounting barriers.

Putnam's hope is to make the opportunity gap the core issue of the 2016 presidential election and he has aligned the stars to make this happen.

Our meetings would sometimes begin with Putnam introducing a hypothetical: if he happened to have a meeting scheduled with Jeb Bush this Friday, what are the two or three messages we would want to get across, and how would we do it?

Putnam has in fact been meeting with President Barack Obama (a former participant in Putnam's Saguaro Seminar), Hillary Clinton's team, Congressman Paul Ryan and the current Republican frontrunner for 2016, Jeb Bush.

Obama has since put income inequality and social mobility at the top of his agenda, and Bush has called the opportunity gap "the defining challenge of our time."

The purpose of Our Kids is to set this debate into full swing across the country. David Gergen, a former adviser to four US presidents including Obama, has called the "path-breaking" book a must-read for both the White House and the wider public.

Inequality of Opportunity: A 'Purple' Problem
Inequality of opportunity is what Putnam is fond of calling a "purple" problem: it transcends the political divide between red and blue states. Around 95% of Americans agree that "everyone in America should have equal opportunity to get ahead."

This is perhaps unsurprising. Equality of opportunity is the cornerstone of the American Dream, defined by 20th century historian James Truslow Adams as:

[a] social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable … regardless of the fortuitous circumstances of birth or position.

Whatever truth this dream once held, the data is indisputable. It is widely recognized that social mobility in the US is now among the lowest in the OECD.

What Our Kids adds is evidence that this gloomy social mobility data is the tip of the iceberg.

The worst is yet to come: social mobility "seems poised to plunge in the years ahead, shattering the American dream".

Rearview Mirror Driving
Putnam has long argued that social mobility measures provide only a "rearview mirror" take on the problem.

This is because standard measures assess how social class passes from parents to their children, and logically we can only calculate this once the children have entered their 30s and 40s and demonstrated their full earning potential.

This means today's social mobility data are a lagging indicator, which only tell us what was happening in children's formative years 30 to 40 years ago.

To look out the front window and see where America is now -- and where it is going to next -- we need to look carefully at the formative influences shaping young people today.

Trouble Ahead
Our Kids begins with a journey to Putnam's home town of Port Clinton, Ohio, where he graduated from high school in the class of '59. This town is the origin of the book's title: Port Clinton townsfolk called all the community's children "our kids."

The research team found that most of Putnam's classmates, whether born rich or poor, went on to enjoy better lives than their parents. If we set the influence of race aside, social class was only a modest influence on the lives of Putnam's generation.

Yet the pathways followed by his generation's children -- and their children's children -- have been starkly divergent.

These pathways are illuminated by interviews with young people across the country. They were revelatory even for the research team. Young people who live near one another, but who sit on opposite sides of the class divide, experience utterly different worlds.

The statistical data shows that these individual stories are representative of the lives of millions:

• The stable nuclear family is as strong as ever for rich families, while an incredible 70% of poor children live in single-parent families -- up from just 20% in the 1960s.

• More than half of American families live in neighborhoods segregated by class, clustering rich kids in high-quality schools and poor kids in low-quality schools.

• Most Americans now meet and marry within their class. Rich kids end up with two high-earning breadwinners and a powerful network to draw upon, while poor kids live with a single parent on a low income, and often find themselves in caring roles.

• While parents' extracurricular "enrichment spending" on the top 10% of kids has doubled since 1970 to almost $7,000 per year, the bottom 10% kids still receive only $750.

• The gap in elementary and secondary school performance between children from poor and rich families has grown by 30-40% over the past 25 years.

• College attendance is now class-based rather than merit-based. A child is more likely to end up with a college degree if they are not-so-smart or hard-working (bottom third of test results) but are rich, than if they are smart and hard-working (top third in test results) but are poor.

Each of these measures is connected to future earnings. This is why social mobility is set to collapse: today's low-income children face a deluge of developmental barriers, the effects of which will play out over the next few decades.

The long-term costs of the opportunity gap are expected to be immense, and result in lost labor productivity, increased crime and public health impacts.

Georgetown University economist Harry Holzer and his team estimate that today's total cost of poverty is at least $500 billion per year. If Our Kids is right, this cost will continue surging upward.

Meeting the Challenge
Soaring income inequality is a primary cause of the growing opportunity gap.

The team's research suggests that the most important prescription is to restore working-class income. Even small increases in income appear to have substantial positive effects on opportunity indicators, from marriage stability to SAT scores.

The next most promising intervention is early childhood education, which has been shown to have positive effects on academic performance, criminal behavior and lifetime income, with an attractive rate of return.

Other levers include social norms, such as shifting the stigma from unwed parenting to unplanned parenting; reducing incarceration rates through softer sentencing for non-violent crimes, such as many of those associated with the war on drugs; and replacing failed community ties with formal mentoring and coaching programs, for both children and their parents.

Low-income children face myriad disadvantages and these call for an equally diverse set of responses. Yet the main message is clear.

Americans' incomes must once again be made more equal.

Reuben Thomas Finighan is a senior research officer at the Melbourne Institute and a fellow of the ARC Life Course Centre of Excellence at University of Melbourne. This article was originally published on The Conversation. Read the original article.

Reining in the Executive Branch

Thomas A. Hemphill - March 16, 2015

Earlier this year, Sen. Rand Paul (R., Ky.) and Rep. Todd Young (R., Ind.) introduced the Regulations From the Executive in Need of Scrutiny Act of 2015, or REINS Act. The REINS Act, first introduced in October 2009 by a different pair of politicians, passed the House in both of the last two Congresses -- but each time, Senate Majority Leader Harry Reid (D., Nev.) failed to schedule a hearing. Today, however, both chambers are Republican-controlled.

The REINS Act would require a joint resolution (i.e., one passed by both houses of Congress) before "major" new federal regulations -- those costing $100 million or one million hours of paperwork -- could take effect. It attempts to recapture the legislative power that Congress has delegated to executive-branch agencies over the past several decades.

According to work by the American Action Forum (AAF), the REINS Act could save more than $27 billion in annual regulatory costs and 11.5 million in paperwork burden hours. Over the period 2005-2014, federal regulators issued 755 major rules, with Congress reviewing no more than a miniscule number of them. Under the act, Congress would not stop all major rules, or even the overwhelming majority, but as AAF suggests, "perhaps five to ten a year could receive significant debate." At the very least, this act will keep federal agencies on notice.

The EPA's proposed power-plant regulations are one example of a major rule that deserves debate by elected officials. This rule, to be finalized in June 2015, is designed to reduce carbon-dioxide emissions from power plants by 17 percent (relative to their 2005 levels) by 2020, and 30 percent by 2030. This rule will force the retirement of coal-fired plants across the country.

Yet, according to the EPA, U.S. carbon-dioxide emissions declined 10 percent between 2005 and 2012, due in large part to increased use of natural gas and lowered national energy consumption. Without the rule, the U.S. is already more than halfway toward its goal of 17 percent by 2020 -- and that was accomplished voluntarily.

Environmental regulation can also restrict or deter market-driven innovations that can benefit society. The absence of this EPA rule might allow the power industry to make additional investments in innovative, productivity-enhancing technology, and pass on the savings to consumers. In contrast, research undertaken by the Center for Data Analysis at the Heritage Foundation found that industry compliance with the EPA rule would cost a family of four approximately $1,200 per year, along with more than 600,000 jobs lost by 2023.

The EPA's power-plant rule, then, demonstrates what the REINS Act could accomplish: Under the act, Congress would debate the costs and benefits of the policy -- and would very likely refuse to approve it.

Thomas A. Hemphill is an associate professor of strategy, innovation, and public policy in the School of Management, University of Michigan-Flint, and a Senior Fellow at the National Center for Policy Analysis.

A Bill to Improve Existing Medicines

Rep. Gus Bilirakis - March 13, 2015

Innovation is all around us. We see it in electronics, automobiles, and many other sectors of our economy. American consumers regularly use products with new features they believe will make their lives a little more interesting, more convenient, more efficient, or otherwise better.

But while a thinner phone or a faster computer certainly may seem significant and exciting, these innovations pale in comparison to the life-changing and life-saving improvements in medicines that should be reaching patients. Innovations like these -- ones that could, for example, make it easier to stay with your drug regimen by deterring abuse or reducing side effects -- are simply not being brought to market with any regularity.

Many American patients, including many of my neighbors in Florida, rely on medications each and every day due to chronic conditions. New innovations can improve their lives. But the current approval system for medicines does not effectively invite the robust development of drug improvements.

This is why I am introducing the PATIENT Act, which will provide an increased incentive for innovators who seek to make existing medications better. I want to help bring our friends, families, and neighbors improved medicines -- ones that have less severe side effects or can be taken just once a day instead of several times.

It turns out that my legislation is very much in the spirit of what the authors of existing law envisioned when they set out to ensure a fair market for medications. That law, called "Hatch-Waxman," includes an incentive for drug manufacturers to develop improvements to existing medicines. In return for such improvements, manufacturers receive 36 months of "market exclusivity" -- a time period in which competitors cannot copy the new innovation. This, in theory, allows manufacturers to recover the cost of developing the medicine.

So, problem solved, right? Not quite. Three years of exclusivity is simply not enough time for companies to recoup the investment needed to bring improved medicines to patients. My proposal seeks to expand this incentive by two years if meaningful improvements are demonstrated.

We must make this happen. Encouraging incremental innovation for medicines is health-care reform we can all support.

Rep. Gus Bilirakis (R., Palm Harbor), a member of the Energy and Commerce Subcommittee on Health, represents the 12th congressional district, which includes all of Florida's Pasco County and northern parts of Hillsborough and Pinellas counties.

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