The (Un)Affordable Care Act

February 4, 2011

by Christina Moore

The Affordable Care Act continues to be a hotly contested issue. The main focus of the argument remains along partisan issues, as opposed to a review of the actual policy. The goal of health care reform was to improve the current health care system. To create a permanent change, the ideal policy that would dramatically overhaul the health care system would be feasible, durable, and bipartisan. However, this legislation does not meet any of those criteria after examining the actual cost, the burdening effects on employers, and the flaws in the individual mandate.

Actual Cost

One of the main reasons people support the Affordable Care Act is the amount of money that it is predicted to be saved. The Congressional Budget Office released their estimation that the Affordable care act will reduce the federal deficit by $230 billion over the first 10 years. On the contrary, this health care reform will cost the government $938 billion dollars over ten years (Kahn, Karl & Wolf, 2010). For this law to save money, as opposed to inflicting costs on taxpayers, the controversial Medicare cuts must take place and the estimated costs will have to have been projected correctly, which in reality remain relatively unknown.

Effect on Employers

Health care costs are expected to increase for all but 3 percent of employers due to the new required regulations for health care plans (Fritz 2010). With our current economic instability, further job loss may ensue. The argument against this is that businesses would be saving money on health costs in the long run, which could inspire more hiring. The problem with this idea is time. Our unstable economy needs to be focused on job creation now instead of running the risk of losing even more jobs.

To ease into these extensive regulations, employers have been provided with the option to apply for a waiver. However, these waivers are a temporary fix, allowing employers to maneuver around these unrealistic health care regulations. Currently 733 employers have been given a waiver for the 2.1 million workers affected (HHS 2010). The need for waivers illustrates that the law’s requirements of the new health care plans are not feasible. Questions arise regarding if these waivers are fair. Why are some companies gaining this special treatment? If companies do not apply for these exceptions, they will be forced to follow these unrealistic regulations or they may choose to hire more temporary or contracting workers as opposed to full time employees.

Weak Individual Mandate

To keep the healthcare costs down, an individual mandate has been proposed. Individuals will be required to buy health care or they will be fined. However this fee may not be the best incentive to buy health care. Paying the fee to remain uninsured may be cheaper than paying for health insurance. Furthermore, an individual can simply pay this fee until they need health care, which undermines the cost that is supposed to be distributed among everyone paying for health care according to the law’s purpose.

What to do now?

Problems, such as the cost of the Affordable Care Act, are already arising in the beginning stages of its implementation, and flaws in the cost calculations are being revealed. Just a week ago, President Obama admitted in his State of the Union that he would be open to suggestions regarding changing the health care legislation, illustrating an opportunity to revisit this reform.

Two options exist for our country. Both parties can continue to fight against each other with one side fighting to keep the Affordable Care Act at any cost as it continues to be implemented without bipartisan support; or, on the other hand, this law can be seen as a starting point for creating a sustainable and implementable health care reform. A new policy could be created and passed with bipartisan votes and, more importantly, be supported by a large majority of the American public.

If the goal is to truly improve our country’s health care system, then we need to focus on creating a strong law that will be maintained, regardless of which party gains control in the executive and legislative branches as opposed to sticking with an obviously flawed policy.

Citations
Fritz, C. “Area Small Businesses Brace For ObamaCare’s Jobs-Killing Taxes, Mandates.” John Boehner. Updated 24 May 2010. Available at: http://www.johnboehner.house.gov/News/DocumentSingle.aspx?DocumentID=186885.
 
“Helping Americans Keep the Coverage They Have and Promoting Transparency.” U.S. Department of Health & Human Services. Updated 26 January 2011. Available at: http://www.hhs.gov/ociio/regulations/approved_applications_for_waiver.html.
 
Khan, H.; Karl, J.; Wolf, B. “Health Care Bill: House Passes $938 Billion Bill, Sweeping Legislation on Its Way to Become Law.” ABC News. Updated 21 March 2010. Available at: http://abcnews.go.com/Politics/HealthCare/health-care-bill-house-passes-sweeping-reform-legislation/story?id=10162080.


Educating Against Religious Illiteracy

February 2, 2011

by Betsy Keating

In September 2010 the Pew Research Center’s Forum on Religion & Public Life released its results of a survey of Americans’ knowledge about different religions. (1) The survey questioned 3,412 Americans aged 18 and older last spring. On average, respondents answered only half of the thirty-two questions correctly. (2) These low scores stem largely from an ignorance of other faiths. However, the Pew Survey also found that many people could not correctly answer questions about their own religion’s doctrines. For example, about 45% of Catholics surveyed could not identify that their own church teaches that the bread and wine used in Communion physically become the body and blood of Christ, not symbols. Around 53% of Protestants surveyed did not know that Martin Luther’s writings and actions began the Protestant Reformation. On the whole, while Americans identified themselves as very religious, they lacked fundamental knowledge of the basics of all faiths, even their own.

Constitutionality of Teaching About Religion

The Pew Center cites educational attainment as a strong indicator of one’s test score: those with more than a college degree answered eight more questions correctly than those with just a high school diploma. Taking a religious studies course also led to higher survey scores—which has significant implications for public education. Indeed, these survey results have led some education leaders to clamor for a more rigorous, analytic treatment of religions in public schools. While teaching about religion in public schools is perfectly legal, the Pew Survey also revealed that the majority of Americans do not actually understand the Supreme Court’s rulings about how religion can and should be addressed in public schools. While 89% of respondents recognized that the Supreme Court has determined that a teacher cannot lead a classroom in prayer, only 23% knew that the Supreme Court has ruled that teachers can read the Bible in classrooms as an example of literature.

In 1948, the Supreme Court decided in McCollum v. Board of Education that teaching Sunday school style lessons during the actual school day was unconstitutional and ordered that schools “stop making religious instruction available to its pupils in the school building and on school time.” (3) The Supreme Court, in the 1963 case Abington School District v. Schempp decided that reading from the Bible each morning in the public school classroom was unconstitutional. However, Justice Tom C. Clark cautioned against completely excising religion from education. In the Court’s majority opinion, he wrote that “it might well be said that one’s education is not complete without a study of comparative religion or the history of religion and its relationship to the advancement of civilization.” (4) Despite barring the use of the Bible in this particular case, the Court did not suggest religion has absolutely no place in public schools. While promoting or imposing any religious doctrine is clearly unconstitutional, religion itself need not be a taboo subject.

Current Treatment of Religion in the History Classroom

Many advocates of teaching about religion echo Justice Clark. Stephen Prothero, a professor of religion at Boston University, argues that “the religious ignorance of Americans is a civic problem of the first order.” (5) Prothero claims that in order to understand history and current geopolitical events, people must understand the tenets of world religions and the belief systems of followers. However, many schools have minimized the discussion of religions in history, literature, and other curricula. Specific data about how religion is discussed in public schools is murky, but Andrew Rotherham, an education policy expert, asserts most classrooms address world religions “superficially,” utilizing “just a few textbook pages that have been heavily sanitized to avoid even the hint of controversy.” (6) Often the threat of complaints from students or parents leads teachers to gloss over, or even totally avoid, the issue of religion.

The incorporation of religion into the curriculum has ignited political tensions in Texas. The Texas Board of Education recently examined claims that its history texts are “pro-Islam” and “anti-Christian.” (7) In his formal resolution submitted to the Board, Randy Rives meticulously counted the exact length allotted to Christianity and Islam in the state’s history books, finding in his analysis a bias against Christianity. He writes that one textbook “devot[es] 120 student text lines to Christian beliefs, practices, and holy writings but 248 (more than twice as many) to those of Islam; and dwelling for 27 student text lines on Crusaders’ massacre of Muslims at Jerusalem in 1099 yet censoring Muslims’ massacres of Christians there in 1244 and at Antioch in 1268.” (8) Based on this evidence, he asserted that the textbook “impl[ies] Christian brutality and Muslim loss of life are significant but Islamic cruelty and Christian deaths are not.” (9) While it is perfectly possible that such biases could exist in any history textbook, members of Houston Federation of Teachers believe the books portray both religions fairly. (10) Ultimately, the Texas Board of Education did issue a resolution echoing Rives’ complaints, warning publishers to eliminate any “anti-Christian” sentiment from future textbooks. Texas, as one of the largest markets for textbooks, holds tremendous power over the content of textbooks nationally.

In some regards, history curricula are subjective: what to focus on and how to present information are value judgments. This subjectivity often leaves history curricula at the will of prevailing political values. In the Texas case, the educational value of the information presented was completely ignored, in favor of creating a rigid dichotomy between Christianity and Islam. Instead of seeing the references to religion as a way to understand the context of historical events, Rives and the Texas Board of Education want history classes to bolster only their current world view; any piece of information that does not neatly conform should be eliminated. History becomes about reinforcing ideology rather than presenting facts. This reality makes implementing any real analysis of religion in history classes a major challenge. As a hugely personal issue, discussions of religion, no matter how they are presented, will have loud detractors.

Studying the Bible as an Elective Course

In addition to including a discussion of religions in history classrooms, a few schools offer a more focused elective course on world religions, and a growing number of schools now have courses studying the Bible as a literary and historical work. A course on the Bible can serve an important role in increasing religious literacy as well as fostering an understanding of how the Christian Bible has influenced the history and culture of the United States and other countries. Biblical references are everywhere–from art to literature to political speeches and historic documents. A course can encourage a better understanding about the actual sources of these allusions. However, a course focusing on the Bible spurs understandable concerns about religious freedom and potential violations of the First Amendment. While a critical assessment of the Bible ideally would occur in such a class, many fear that religious indoctrination will inevitably follow. As many districts offering such classes tend to be more conservative and evangelical, some critics fear that teachers willing and able to utilize a secular, objective lens may not be available to head these elective courses. (11) Yet, such concerns have not stopped states moving forward with optional courses on the Bible. In 2006, Georgia’s legislature created two courses, History and Literature of the Old Testament Era and the History and Literature of the New Testament Era, and set the Bible as the courses’ primary text, becoming the first state to require the Bible as the focal point of such elective courses. (12) This decision follows the increasing strength of two major organizations promoting Bible studies curriculum: The National Council on Bible Curriculum in Public Schools (NCBCPS) and the Bible Literacy Project.

The National Council on Bible Curriculum in Public Schools, which created a Bible-centric curriculum that could be taught constitutionally at public schools, started in 1993 and has grown steadily. (13) Its curriculum, named “The Bible in History and Literature” uses the Bible as its only textbook and has been adopted by 563 school districts in 38 states, reaching over 360,000 students within the past two decades. (14) The organization stresses that its use of the Bible as the primary text allows students to “draw their own conclusions,” but even this simple proposition has complications, as many religious groups utilize different versions of the Bible, which are not necessarily compatible with each other. (15) Mark Chancey, an associate professor of religious studies at Southern Methodist University, criticizes “The Bible in History and Literature” for promoting a “conservative Protestant” understanding of the Bible, which makes “factual errors, idiosyncratic claims, and explicitly sectarian statements.” (16) Further, Chancey notes that the organization did not work with professional religious or Biblical scholars from accredited institutions, relying instead on people involved with conservative Christian groups to create its curriculum.

As the main competitor to the NCBCPS curriculum, the Bible Literacy Project published its own text, “The Bible and Its Influence,” in 2005, and provides online teacher training for the curriculum. (17) Widely considered less conservative than the NCBCPS, the Bible Literacy Project offers an inclusive, positive portrait of Christianity and the Bible as an inspiration for the arts, literature, and historical events like the civil rights movement. Its tone riles some conservatives who prefer the more staunchly Protestant background of the National Council on Bible Curriculum in Public Schools and its use of the Bible as the only in-class text. (18) In turn, John Conn of Americans United for the Separation of Church and State offers a more liberal critique of “The Bible and Its Influence”, condemning it for ignoring historical cases where people have utilized the Bible to justify slavery, discrimination of minorities and women, and events like the Spanish Inquisition. (19) Chancey argues that despite its flaws and the criticism from both sides, the authors of “The Bible and Its Influence” have enlisted “a good faith effort to be nonsectarian.” (20) These two curricula differ both in their methods and their ideology. Just as with the Texas textbook resolution, the debate over which curriculum to implement usually becomes deeply political, following party lines as Republicans support the NCBCPS and Democrats push “The Bible and Its Influence”. This is a complicated, controversial course to offer on its own, but the added political pressures may make it an unpalatable option for states and districts with diverse political and religious backgrounds.

Moving Forward

Despite the great challenges to teaching about religion in public schools today, the religious illiteracy of Americans demands change from our education system. In a highly globalized world, having an awareness of the political and historical ramifications of religious beliefs is a necessary commodity. Religious beliefs influence and often define public policy both in the U.S. and abroad. Without a robust knowledge of world religions and their histories, one cannot hope to understand the rhetoric and actions of world leaders. In addition, as Charles Haynes, director of the Religious Freedom Education Project and a leader at the Bible Literacy Project, argues, “religious literacy also matters because religious freedom matters.” (21) The best weapon against ignorance, discrimination, and fear is education about and exposure to religions other than one’s own. Although controversy and political arguments may stall or even prevent the movement for more thorough treatment of religion in public schools, real change is needed, as the Pew Center’s study illuminates. Moving forward with any change will be a challenge, but the United States cannot reasonably continue to ignore religion in public classrooms when religious literacy is essential for understanding history, current politics, world events, and the American culture at large.

Works Cited

1. Pew Research Center’s Forum on Religion & Public Life “U.S. Religion Knowledge Survey.” 28 September 2010. Web. http://pewforum.org/other-beliefs-and-practices/u-s-religious-knowledge-survey.aspx

2. Pew Research Center’s Forum on Religion & Public Life “U.S. Religion Knowledge Survey.” 28 September 2010. Web. http://pewforum.org/other-beliefs-and-practices/u-s-religious-knowledge-survey.aspx

3. “Religion: On School Time or Off?” Time. 22 March 1948. Web. http://www.time.com/time/magazine/article/0,9171,804516,00.html

4. Abington School District v. Schempp, 374 U.S. 203 (1963). Find Law. Web. http://caselaw.lp.findlaw.com/scripts/ getcase.pl?court=us& vol=374&invol=203

5. Prothero, Stephen. “It’s Time to Teach Religion in Schools.” USA Today. 3 October 2010. Web. http://www.usatoday.com/news/opinion/forum/2010-10-04-column04_ST_N.htm

6. Rotherham, Andrew. “The Real War on Christmas: No Teaching of Religion.” Time. 23 December 2010. Web. http://www.time.com/time/nation/article/0,8599,2039458,00.html

7. McKinley Jr., James C. “A Claim of Pro-Islam Bias in Textbooks.” New York Times. 22 September 2010. Web. http://www.nytimes.com/2010/09/23/education/23texas.html

8. Rives, Randy. “Proposed Texas State Board of Education Resolution on Democratic Values in Social Studies Textbooks.” Web. http://video.onset.freedom.com/odessa/l61l1j-rivesresolution.pdf

9. Rives, Randy. “Proposed Texas State Board of Education Resolution on Democratic Values in Social Studies Textbooks.” Web. http://video.onset.freedom.com/odessa/l61l1j-rivesresolution.pdf

10. “Texas Board of Ed: Textbooks are Anti-Christian.” CBS News. 23 September 2010. Web. http://www.cbsnews.com/stories/2010/09/23/national/main6893460.shtml

11. Van Biema, David. “The Case for Teaching the Bible.” Time. 22 March 2007. Web. http://www.time.com/time/magazine/article/0,9171,1601845-4,00.html

12. Goodman, Brenda. “Teaching the Bible in Georgia’s Public Schools.” New York Times. 20 March 2006. Web. http://www.nytimes.com/2006/03/29/education/29bible.html

13. Van Biema, David. “The Case for Teaching the Bible.” Time. 22 March 2007. Web. http://www.time.com/time/magazine/article/0,9171,1601845-4,00.html

14. National Council on Bible Curriculum in Public Schools. “Where This Has Been Implemented.” January 2011. Web. http://www.bibleinschools.net/Where-This-Has-Been-Implemented

15. National Council on Bible Curriculum in Public Schools. “The Curriculum.” January 2011. Web. http://www.bibleinschools.net/The-Curriculum

16. Chancey, Mark. “Bible Bills, Bible Curricula, and Controversies of Biblical Proportions: Legislative Efforts to Promote Bible Courses.” Religion & Education 34 (2007): 28-47. Web. http://faculty.smu.edu/mchancey/pdfs/Chancey-Bible_Bills.pdf

17. Bible Literacy Project. “Bible Literacy Project: An Educated Person is Familiar with the Bible.” December 2010. Web. http://www.bibleliteracy.org/site/Case/index.htm

18. “High Schools Try Out New Bible Course.” The First Amendment Center. 02 October 2006. Web. http://www.firstamendmentcenter.org/news.aspx?id=17469

19. Conn, Joseph. “Chuck Stetson’s Trojan Horse?” Americans United for Separation of Church and State. January 2006. Web. http://www.au.org/media/church-and-state/archives/2006/01/the-bible-litera.html

20. Chancey, Mark. “Bible Bills, Bible Curricula, and Controversies of Biblical Proportions: Legislative Efforts to Promote Bible Courses.” Religion & Education. 34 (2007): 28-47. Web. http://faculty.smu.edu/mchancey/pdfs/Chancey-Bible_Bills.pdf

21. Haynes, Charles. “Why Religious Literacy Matters.” The First Amendment Center. 10 October 2010. Web. http://www.firstamendmentcenter.org/commentary.aspx?id=23469


Healthy Debt Debate

February 1, 2011

by Chris Hildebrand

The Congressional Budget Office released its January 2011 Economic Outlook on Wednesday, and the news was…not good. While the economy showed continued signs of recovery, it will be several years before unemployment returns to a level resembling normal – unemployment won’t dip below 8% until after 2012 has come and gone. Of course, what many analysts and policy makers were looking for (beyond just the jobs outlook) was the CBO’s projections on the budget problem. While the numbers looked surprising – the deficit would return to 3% of GDP in several years time – they were baseline considerations, designed to allow Congressmen to better predict impacts of proposed policy, and as such were not grounded in a darker political context.

Obama talked about the deficit in his State of the Union Address on Tuesday, noting the gravity of the problem. But in the same breath, he called for further investment in several critical areas: green energy, education, and infrastructure. While he will no doubt continue to reiterate his argument for this spending as a means to ensure continued American competitiveness in a global environment, many will balk at the prospect this spending will have on the debt.

These concerns may be well founded in several respects – the debt, as the Chair of the Joint Chiefs of Staff pointed out, is a massive problem. But there are plans that can certainly solve the problem, if the necessary bipartisan support surfaces from a tense partisan atmosphere in Washington. The sobering news is that these plans will hurt. Major entitlement programs will see cuts, spending will be reduced, and revenues will have to increase from somewhere. Still, many experts remain hopeful that America will muddle its way through this mess, as it always has.

Regardless of what must be done on the national level (and obviously, something should be done, sooner rather than later), there is also a brewing crisis among the states. Traditionally, state budgets take a hit during recessions, as their revenues decrease with the economy and their outlays rise to finance unemployment assistance and other social welfare programs. And that problem certainly applies to the short term outlook for most states today – many states are slashing budgets, laying off workers, and warning of future cuts.

For some states, though, – states such as Hawaii and Oklahoma – the pension funds and retiree health care programs that make up longer term budgets disguise a sleeping dragon. Federal Reserve Chairman Ben Bernanke highlighted these challenges in recent testimony, explaining that many state pension funds and retiree health care programs are seriously underfunded, to the tune of several trillion dollars. Others, though, argue that Bernanke’s concerns are overstated – these are not the pension plans you’re looking for – and believe the outlook for states is manageable with some careful tweaks. While it is important to remember that these are long-term issues which don’t require an immediate fix, like the national debt the federal government now faces, judgment day can’t be postponed forever.

Regardless of where you stand on national or state debt issues, what everyone must have certainly realized by now is that debt issues will certainly come to define America’s political landscape in the coming years. It is, in some ways, the perfect issue to do so, for it encapsulates so many of our traditional ideological differences on government – size, competitiveness, and redistribution. As a result, the debate will be nothing if not furious. What will matter, though, is the quality and nature of that debate. It should be composed of exchanges of ideas and proposals, not loaded partisan rhetoric or carefully veiled insults. Nobody enjoys talking about debt…but since we’re going to have to, we might as well be civil while doing so.


The Youth, the Jobs and the Anger – The Story of the Tunisian Uprising

January 31, 2011

by Luca Etter

The forced resignation of Tunisia’s President Zine El Abidine Ben Ali ended one of the longest reigning and heaviest handed regimes in the world, marked by false elections, rampant corruption and an extremely restrictive press regime. It is the first time an Arab leader has been brought down by street demonstrations, and the fact that most protests were coordinated by social network sites such as Twitter and Facebook – which often times are censured or blocked in Tunisia – makes the events of the last month even more remarkable.

In many ways, among North Africa’s authoritarian regimes, Tunisia seemed like the least likely candidate for a popular uprising. A nation often labeled as the “the most European country of North Africa” has been accepted (and largely ignored) by the West because of its tough stance on Islamic groups (both terrorists and not) and been known for a relatively large middle class, a liberal and mostly secular and stable society. (Tunisia’s northern neighbor, Italy, has been governed by 36 leaders since the end of World War II. compared to Tunisia’s two in the same period.)

It remains questionable whether or not the departure of Ben Ali and his family will mark the beginning of true democratic reform in the country – as promised by Prime Minister Mohamed Ghannouchi and speaker of the parliament Fouad Mebazaa– and who will fill the vacuum left behind by a President who controlled the country for almost 30 years. It will also be interesting to see if Ben Ali is only the first of a number of Arab rulers who will feel the frustration of their people with authoritarian leadership and economic policies. Current events in Egypt suggest that will not be the case.

The Source of Anger

The main reasons why leaders across the Arab world should be warned by the Tunisian “jasmine revolt” is that the root cause of the anger is a situation many Arab countries are familiar with: deep seated frustration with the regime combined with dire economic prospects of the country’s youth. Tunisia, like most Arab countries, faces severe unemployment which is disproportionally affecting the young and the better educated. The unemployment rate of youth below 25 with a university degree is at a very high 30 percent, and a World Bank study has shown that for certain disciplines, such as law, one out of two graduates is without a job 3.5 years after graduation.

The primary reason for the high unemployment rates have been known for a while and are not unique to Tunisia: a large public sector where jobs are awarded based on favorism and connections rather than merit, a large informal economy providing low quality and low paying jobs, as well as malfunctioning labor market institutions. Making matters worse, the region faces the second highest population growth rate in the world – second only to Sub-Saharan Africa – meaning that the 70,000 jobs the Tunisian economy has created each year since 2000 were not enough to absorb the ever growing cohort of entrants to the labor market. Moreover, the current crisis in Europe, and particularly high unemployment among immigrants in France, has limited the prospects for young Tunisians to emigrate and reduced the stream of remittances from France and the rest of the EU.

Political Reform – and Jobs

For as remarkable as the latest developments have been and for as much as they represent a great opening for true democratic reform in Tunisia and potentially other countries in the region – they will only be sustainable if they are accompanied by serious economic reforms that dramatically improve the perspectives of the Arab world’s huge young population.

For these reforms to be effective, many people that have lived fairly well under Ben Ali will have to give up some of their privileges. The financial market is dominated by state-owned banks and getting credit is very difficult, in particular for young entrepreneurs without connections to the ruling elite. Unions have a firm grasp on lawmakers in many industries and have created a divide between insiders (those having jobs and enjoying generous benefits) and those that are looking for jobs (mostly young university graduates without connections to the establishment). Professional associations, such as those of lawyers, limit competition and make entry for new graduates difficult to impossible. And finally, despite the government’s emphasis on promoting job growth, labor market policies in Tunisia have had little success to effectively integrate the youth in the job market.

The future of Tunisia is uncertain and it is likely that the country that was longing for change for more than three decades will take a while to reorient itself. It remains uncertain if the resignation of President Ben Ali does indeed change the system, or maybe only the face of it (albeit a very visible one: there was a picture of Ben Ali in every single government office and almost every street in Tunisia). Whatever democratic reforms may or may not happen, they will only do half the job. Tunisia and its Arab neighbors face the immense challenge of the greatest youth cohort of their history entering their labor markets and more than anything else they demand jobs. Otherwise, they may take to the streets not only in Tunis – but also in Amman, Algiers, Beirut, Cairo, and Sana’a.


In Downturn, States Reevaluate Tax Incentive Programs

January 25, 2011

by Kathryn Bailey

States across America routinely seek to grow their economies by luring companies to establish or expand their state presence in exchange for incentives, usually in the form of tax breaks. Politicians are eager to use economic development programs to create jobs within their state or retain existing ones. Every state runs some type of development program, and about 45 offer tax incentives for corporations. Tax experts estimate that state and local governments distribute about $50 billion per year in targeted incentives to business.[i]  The promise of tax incentives lies in their purported ability to result in net gains for state economies through corporate reinvestment and hiring. However, in light of budget shortfalls in at least 40 states in the coming fiscal year (2012)[ii], including many states with generous incentives, a closer look at the costs and effectiveness of these policies is critical.

The state of Texas has traditionally been very business and investment-friendly, offering generous incentives for research and development and low corporate taxes. In recent years, Texas has touted its desire to attract companies to establish a presence in the state with aggressive incentive programs. By some accounts, Texas’ strategies for economic growth have been highly effective. According to the National Bureau of Economic Research, the U.S. economy peaked in December 2007 before entering a recession. Texas’ economy, however, continued to grow throughout most of 2008 and declined more slowly than the entire U.S. economy during the recession (-1.4 percent versus -2.4 percent).[iii]

Texas’ most prominent laws impacting economic development include the Texas Enterprise Fund and Emerging Technology Fund. While state leaders, including Governor Rick Perry, are eager to continue to enhance Texas’ competitiveness, the state is facing a projected budget shortfall of as much as $24 billion over the next two years, and economic development incentives will undoubtedly have to compete with other programs for state dollars. The question of whether the programs are paying off in terms of employment and economic growth is one that the state will be forced to examine closely in the coming months.

How State Economic Incentives Work

The general goal of economic incentive programs is to create jobs and increase incomes by using lower taxes to stimulate capital investment and economic activity. A favorable tax incentive could work to attract investment from companies outside the state. In a recruitment letter sent by Governor Perry to California businesses in December of 2010 he stated, “As the State of California continues to support legislation and initiatives that cause undue burden and taxation on companies doing business within the state, I invite you to consider your future in America’s new land of opportunity: the State of Texas.”[iv]

A successful set of incentives that leads to new investment by businesses can create jobs and increase wages and incomes, thereby increasing aggregate consumption and driving up the gross state product. These incentives largely involve lowering the total cost of operating businesses by offering favorable tax treatment (such as tax credits). The costs of the tax preferences offered may be partially offset by an increase in state income, sales or corporate tax revenues due to the new business activity (depending on which taxes are levied by the state).

Effectiveness of Texas Programs

There are a range of policies in Texas meant to influence job creation and capital investment, and the forthcoming budget balancing challenges are spurring a closer look into what policies have demonstrated convincing returns. On December 10, 2010, the Texas Comptroller, Susan Combs, released a report evaluating the state’s economic incentive programs that called for increased scrutiny of their benefits and costs. “While incentive programs create jobs for the Texas economy, the total number of jobs directly attributed to incentive programs represents a small segment of statewide employment. Incentives can be beneficial for targeting specific industries or achieving specific goals, but should not be relied on for overall economic growth.”[v] According to the report, only 0.8 percent of the jobs in Texas can be directly attributed to its economic incentives programs.[vi]

Lawmakers on both sides of the aisle are criticizing these incentives programs; Rep. David Simpson (R) has announced plans to target the Enterprise and Emerging Technology Funds. Rep. Mark Strama (D), Chairman of a House committee studying the incentives, predicted that the two funds would receive less money in the next two-year budget. He said that he believes the technology fund in particular, has strayed from its original mission of creating a market for innovations coming out of higher education institutions, and instead is now an avenue for companies that are unable to raise private capital.[vii]

Aside from the Texas Enterprise and Emerging Technology funds, another major policy meant to increase economic growth and employment is the school property tax break. Property taxes comprise a major portion of operating expenses for capital-intensive companies that have a large physical footprint, such as energy (both oil refineries and green energy projects such as wind farms). In an effort to recruit these types of projects to Texas, legislators in 2001 authorized school districts to grant property tax breaks, for which the state government would reimburse the districts in per-pupil funding.

In her report on economic incentives, Ms. Combs wrote that those tax breaks have helped the state to attract industries with significant employment, but have also been “increasingly used to over-incentivize projects that create few or no jobs.” Of the 98 investments that have received tax breaks, 63 are for wind farms. The cost per job for the wind power projects is about 10 times the cost of a manufacturing job and 30 times the cost of research and development job under the school district allowance.[viii] If the school property tax break continues, it will cost the state about $400 million in revenue lost by Texas school districts in the coming two-year budget.

Debates Over Economic Incentive Programs Extend Beyond Texas

While Texas may soon be forced to reevaluate its tax incentives, other Governors have indicated that they intend to continue policies that ease the corporate tax burden. In his inaugural speech, Florida Governor Rick Scott asserted that “the only path to better days is paved with new private sector jobs.”[ix] He described a program of eliminating business taxes as part of his plan to create jobs, dubbing them, along with regulation and litigation as the “axis of unemployment.”[x] Research suggests, however, that this policy may not be an effective strategy. A study published by the Heartland Institute in 2006 examined the failure of a Michigan corporate incentive policy to create jobs. The authors suggest the decisions which companies should receive incentives were made not on the basis of long-term economic development goals, but were instead based on political considerations. As a result, the author believes policymakers overestimated the potential job impact of the incentives.[xi] Regardless of the incentives’ impact on jobs, Texas and Florida both face massive budget deficits and their revenue losses from current or proposed tax structures are particularly impactful in light of their lack of personal income taxes.

While tax incentives to attract employers and encourage economic growth have long been a key element of economic development strategies for state elected officials, these policies merit closer cost-benefit analysis and impartial evaluation. This would undoubtedly lead to heated political debate and may entail reexamination of widely accepted truths. Nonetheless, as states prepare to make sweeping and painful cuts to government programs to balance their budgets, a second look at the results of these incentives programs is warranted.


[i] LaFaive, Michael. “Analysis: Targeted Tax Incentives Unnecessary, Ineffective.” The Heartland Institute. July 2006.

[ii] McNichol, E.; Oliff, P.; Johnson, N. “States Continue to Feel Recession’s Impact.” Center for Budget and Policy Priorities. Updated 16 Dec 2010. Available at: http://www.cbpp.org/cms/?fa=view&id=711.

[iii] Comptroller’s Economic Outlook, updated Oct. 22, 2010. Text available at: http://hlrgazette.com/2010-articles/114-may-8-2010/921-texas-economic-outlook.html.

[iv] Register, Jan. “Texas tries to recruit California businesses.” Orange County Statesman. 15 Dec 2010.

[v] Combs, Susan. “An Analysis of Texas Economic Incentives 2010.” 10 December 2010. Available at: http://www.texasahead.org/reports/incentives/pdf/EconomicIncentives.pdf.

[vi] Ibid.

[vii] Copelin, Laylan. “Report adds fuel to debate about Texas incentive programs.” The American-Statesman. 22 Dec 2010. Available at: http://www.statesman.com/news/texas-politics/report-adds-fuel-to-debate-about-texas-incentive-1141330.html

[viii] Ibid.

[ix] “Florida Governor Rick Scott Inaugural Address.” 4 Jan 2011. Available at: http://www.flgov.com/2011/01/04/florida-governor-rick-scott-inaugural-address/.

[x] Ibid.

[xi] LaFaive, Michael. “Analysis: Targeted Tax Incentives Unnecessary, Ineffective.” The Heartland Institute. July 2006.


Michelle Rhee and the “Parent Trigger”

January 24, 2011

by Scott Baumgartner
January 24, 2011

When Michelle Rhee’s organization Students First released its policy agenda last week, it tracked closely with many of the things she tried to do as chancellor of the DC Public Schools. But her agenda contains some surprises that have traditionally been part of the conservative approach to education reform, as noted by Stephen Sawchuk at Education Week. One such aspect is her support for vouchers, though she takes great pains to avoid calling them by that toxic name. A somewhat newer idea she supports is the “parent trigger.” (Though many of the leaders of the parent trigger effort in California were actually Democrats, similar proposals in other states have been championed by Republicans.) In this radical reform option, dissatisfied parents can initiate a petition in an attempt to restructure a failing community school. California passed the first such law in the nation last year and in December, parents in Compton collected the necessary signatures to restructure McKinley Elementary School.

The parent trigger may sound like a bold idea to improve parent involvement in children’s schools. Rhee and Students First calls it “radical community empowerment” that “shifts power to the parents whose children are fated to attend chronically failing schools.” But the truth is somewhat cloudier. The parents who delivered the petitions to the Compton Unified School district were organized by Parent Revolution, a group whom, according to the L.A. Weekly, Michelle Rhee herself consulted with. It has an operating budget of about a million dollars, funded by the Bill and Melinda Gates Foundation and the Walton Foundation, among others.

Does a private organization’s involvement in the petition to restructure McKinley invalidate the signatures? To whom has the power been shifted – parents or opportunistic private organizers? On the one hand, some might argue that Parent Revolution simply brings political expertise to parents who are advocacy neophytes, but want to change an irreversible situation in their children’s schools. Others are more cynical and see Parent Revolution as a front for a sneak attack on public education; more Astroturf than grassroots, it’s the education reform analogue of the tea party group Americans for Prosperity. If business-minded education reformers believe that competition improves educational opportunities, they could have opened a charter school in Compton and convinced parents to send their children there instead. The parent trigger, however, doesn’t increase competition. Instead of adding a charter school, the parent trigger swaps one in for the public school. That doesn’t seem to provide a better set of choices, especially for the 49 percent of parents not required by law to sign a petition initiating the parent trigger. And John Fensterwald, writing for the Silicon Valley Education Foundation, argues that of the four restructuring options for schools after the parent trigger has been pulled, handing the running of the school over to a charter is the only plausible choice (the other three are shutting the school down, firing the principal and half the staff, or firing the principal and instituting other reforms).

McKinley Elementary was, by all accounts, a poorly performing school in need of fixing. Parents who send their children to a school like that should be outraged and demand better. Speaking from my own experience as a teacher, it’s frustrating to sometimes think that you care more about a child’s educational success than that child’s parents do, and so in a lot of ways, it’s refreshing to hear about parents being invested and involved. That is, unless the parents, who want to do well by their children, have been sold a bill of goods by people or organizations with other motivations. Generously speaking, it’s up for debate whether charter schools perform better than the nation’s public schools. Some do, but a lot more are worse, not just in student achievement but also in issues such as segregation. And at the end of the day, the parent trigger doesn’t change any of the environmental or socioeconomic factors that also contribute to poor student achievement, so there shouldn’t be the expectation that life under a charter will be substantially different.

When assessing reforms that involve charter takeovers, Michelle Rhee should consider the experience of Friends of Bedford, whom she brought in to Washington, D.C. last year to take over struggling Dunbar High School. Parents, teachers, and community members, however, raised concerns about Friends of Bedford’s leadership, after the arrest of six Dunbar students for the rape of a fellow student on school grounds, allegations of drug use in the school building, an administrative response that focused on hiring more security guards than providing meaningful support services, to simply poor academics. Friends of Bedford, for their part, placed some of the blame for its poor performance on the differing responsibilities of Dunbar and their other charter schools – namely, the requirement that they accept all students. But in December 2010, interim chancellor and former Rhee deputy Kaya Henderson removed Friends of Bedford from Dunbar. Other charters may not fare so poorly, but this illustrates how a parent-triggered charter takeover may not be the solution to a failing school, and it shows how a responsive school administrator can obviate the need for such a law.


The Cost of Coalescing in British Politics

January 20, 2011

by Isabel Taylor
January 20, 2011

The festive period is supposed to be a period of good will. Apparently, no-one told various members of the UK’s coalition government this. Barely six months into its lifetime, fractures and divisions have begun to appear both between the two main parties of the coalition (the Conservatives and Liberal Democrats) and within these groupings. And some have begun to turn ugly. In recent weeks, the coalition government has had to face up to violent protests against their plans to raise university tuition fees and undercover journalists reporting the less-than-loyal comments of a number of government ministers and poor showings in last week’s special election in the north of England where the Labour Party managed to return its candidate as the local Member of Parliament and increase its majority along the way.

The Liberal Democratic leader, Nick Clegg, led a populist election campaign centered on a number of high-profile pledges, such as that to abolish university tuition fees, and won many votes because of them. Although some political commentators predicted no party would win an outright majority in the General Election in May 2010, no formal talks were conducted between parties until the results were in. Many voters did not consider this possibility when casting their ballots in their local constituency and traditional Lib Dem voters in many ares of the country actively voted against Conservative candidates in an attempt to prevent a right-wing government. Seeing candidates for whom they voted sitting alongside the old enemy in a Conservative-led government is a bitter pill for many of them to swallow.

As Deputy Prime Minister, Nick Clegg is the understudy leader of a government that has introduced a number of policies seemingly at odds with his party’s election pledges, including raising the price of university education. One senior Lib Dem has claimed that they should not be held accountable to their election manifesto but rather to the coalition document to which they signed up to after all votes we cast (http://www.bbc.co.uk/news/uk-politics-11803719). This argument has not convinced many Lib Dem supporters, with a recent YouGov poll suggesting that their support has dropped by two thirds (http://today.yougov.co.uk/commentaries/peter-kellner/two-thirds-lib-dem-voters-desert-party).

But perhaps inevitably, the coalition is also being attacked by the right-wing of the Conservative Party with some traditional Conservatives, still preoccupied with issues like European integration and immigration, appearing to need to be dragged kicking and screaming into the 21st Century. These factions certainly do not naturally coalesce with any socially liberal grouping, even if the two parties now share much of a common economically liberal rhetoric. Indeed, a former cabinet minister in Margaret Thatcher’s Conservative government of the 1980s wrote in a national newspaper that he hoped the Lib Dems would finish in 4th position in the recent by-election (http://www.guardian.co.uk/commentisfree/2011/jan/16/tory-embrace-split-lib-dems). Even for such a famously right-wing politician, this is not the conciliatory attitude on which successful coalitions must surely be based.

Though it may be overly-ambitious to suggest that the coalition will change the nature of the UK’s political process, it is perhaps not as unlikely that the nature of – and the relationship between – the parties will inevitably be impacted by the current political set-up. The Liberal Democrats have never previously been tested in a national position of power and the conflicts that have recently exposed their disparate support has led one commentator to ask “How many parties are the Liberal Democrats” (http://www.guardian.co.uk/commentisfree/2011/jan/16/tory-embrace-split-lib-dems). Meanwhile, the leader of the Labour Party, the newly elected Ed Milliband, has called for disenchanted Lib Dems to support his party which he is attempting to rebrand as the only truly socially progressive group in British politics. If he succeeds, his tactics may not only return the Labour Party but also threaten the future of the Liberal Democrats as we know them today and the dynamics of collaborative politics in the UK.

Further reading:
http://www.newstatesman.com/blogs/mehdihasan/2010/05/lib-dem-tory-labour-clegg

http://www.telegraph.co.uk/news/newstopics/politics/liberaldemocrats/8215481/Vince-Cable-I-have-the-nuclear-option-its-like-fighting-a-war.html

http://www.guardian.co.uk/politics/2011/jan/12/liberal-democrats-oldham-saddleworth-byelection

http://www.guardian.co.uk/commentisfree/2010/dec/14/betrayal-clegg-punish-alternative-vote

http://www.bbc.co.uk/news/uk-politics-12191431


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