A Practical Path Toward a Carbon Tax

Rep. John Delaney’s carbon tax plan would fund rebates for low-income families, help displaced coal workers and lower corporate tax rates. But its best virtue might be bipartisan appeal.

In advance of global climate talks set to continue in Paris this November, the United States announced an ambitious goal last fall: to reduce the nation’s greenhouse gas emissions by 26-28 percent below 2005 levels over the next decade.

According to the White House, achieving this target would require the United States to roughly double the current pace of reductions in carbon pollution. In 2013, U.S. carbon emissions totaled nearly 6.7 million metric tons – making America the world’s second-largest producer of carbon emissions after China.

Across the political spectrum, experts increasingly agree that the most direct and efficient way to reduce carbon is to put a tax on it. In British Columbia, for example, per capita fuel consumption has dropped by 16 percent since a carbon tax was introduced in 2008 – compared to rising consumption in the rest of Canada. The province has also continued to enjoy a healthy rate of economic growth at 2 percent per year. As an op-ed in the Globe and Mail put it: “It works.”

Where there’s less agreement is how to structure a carbon tax – and most importantly, how to spend the money it would raise. According to Yoram Bauman and Shi-Ling Hsu, imposing a British Columbia-style tax of $30 per metric ton in the United States would raise as much as $145 billion a year. It’s a tempting sum of money, particularly for progressives with a growing wish list of domestic spending priorities.

But some argue that the only politically feasible way to pass a carbon tax in the United States is to keep it “revenue neutral” – meaning that every dollar raised in revenue goes toward rebates or other tax cuts.

That’s also the approach in British Columbia, where carbon tax revenues were expected to total $1.2 billion this year. Officials have used the funds to pay for rebates to low-income families (equal to $115.50 per adult and $34.50 per child) and to lower taxes on individuals, companies and small businesses. A report by the nonprofit Clean Energy Canada concluded that revenue neutrality “has two very important up-sides: it helps bring the business community onside (or at least, it keeps that community from going too far offside), and it makes the tax difficult to remove once it’s in effect.”

Among U.S. champions of a carbon tax, proponents of a similar “tax swap” include Democratic Rep. John Delaney (MD-6), who introduced carbon tax legislation this spring. “If you want a carbon tax put in place as soon as possible, you have to embrace a carbon tax that has an opportunity for bipartisan appeal,” Delaney says. “We’ve seen a lot of proposals where the revenues are used by government any way they want. People don’t really trust that, and certainly not my Republican colleagues.”

Continued at the Washington Monthly…

The Great Recession’s Last Casualties

For many Americans who’ve been out of work long-term, there may never be a recovery.

The Department of Labor reports that the unemployment rate continues to decline. In June 2015, the economy added 223,000 jobs, bringing the jobless rate down to 5.3 percent.

But even as the jobs picture is improving, the plight of the “long-term unemployed” remains a persistent problem – thereby threatening to stain the otherwise rosy picture of the post-recession recovery.

The U.S. Bureau of Labor Statistics (BLS) reported that about 2.1 million Americans were “long-term unemployed” in June 2015 – meaning they were out of work for 27 weeks or more. Among these workers, nearly 1.4 million Americans have been out of work for a year or more.

Continued at the Washington Monthly…

Battling Corporate Short-Termism

Worsening corporate myopia is a threat to long-term growth, say Brookings Institution scholars William Galston and Elaine Kamarck.

In 2014, companies in the S&P 500 spent $914 billion on share buybacks and dividends – or about 95 percent of their earnings, according to BloombergBusiness. At the same time, companies’ capital investments – in equipment, facilities and research – fell.

Such is the consequence of corporate “short-termism,” a phenomenon that Brookings Institution scholars Bill Galston and Elaine Kamarck argue in an important new report poses an increasing threat to long-term economic growth.

“There’s nothing wrong with paying investors handsome returns, and a vibrant stock market is something we should wish for,” Galston and Kamarck write. “But when the very few can move stock prices in the short term and reap handsome rewards, and when this cycle becomes standard operating procedure, crowding out investments that boost productivity and wage increases that boost consumption, the macro-economic consequences are debilitating.”

This short-termism, Galston and Kamarck say, distorts corporate behavior and the economy in a variety of destructive ways.

Continued at the Washington Monthly…

Why Can’t You Text 9-1-1?

9-1-1 needs to move into the Internet era.

In today’s Internet-enabled world, most people take for granted their ability to communicate with just about anyone, anywhere, and by any number of means – voice, text, email or through social media such as Facebook or Twitter.

But one essential communications service remains largely trapped in the landline era: 9-1-1.

In many parts of the United States, 9-1-1 is still rooted in the landline-telephone-based infrastructure that gave the system its start in 1968. The texts, videos, images and data now integral to rapid-fire modern communications are beyond the capacity of most 9-1-1 systems. While a concerned citizen could snap a photo of a fleeing suspect on her smartphone and post it to Facebook, she likely can’t share that same photo with a 9-1-1 dispatcher. As of November 2014, just 152 counties in 18 U.S. states even had the capability for citizens to text to 9-1-1.

But a few jurisdictions – such as Iowa and Vermont – have made the leap to Internet-enabled 9-1-1, known as “Next Generation 9-1-1.” The potential rewards include not just better public safety but cost savings in the long run.

Continued at the Washington Monthly…

The Long Term Care Time Bomb

America’s biggest demographic challenges might be posed not by the very young, but by the very old.

In 1900, according to the U.S. Census, just 122,000 Americans were age 85 and older. Today, it’s 6.1 million.

Americans 85-plus now account for about 13 percent of all Americans over age 65, and more than 1 in 4 seniors (26 percent) are now over age 80. By 2050, says the Robert Wood Johnson Foundation, the number of Americans over age 85 is expected to reach 19 million nationwide.

Millennials may continue to grab the demographic limelight – they’re now officiallythe largest generation in U.S. history – but the rapidly-growing cohort of very old Americans demands as much attention, if not much more concern. Particularly worrisome: The exploding cost of long-term care.

Here’s a simple but stunning fact: Public policy has made no provision to finance the growing long-term care needs of aging Americans in a fiscally sustainable way. In fact, a bipartisan commission convened by Congress in 2013 failed to agree on a viable solution to pay for Americans’ increasing long-term care needs. The result: A looming social and economic crisis that threatens both middle-class finances and well-being.

Continued at the Washington Monthly…

Open Data, Better Cities

What Works Cities, a new $42 million initiative, will help cities use data to improve performance and policy.

In San Francisco, foodies seeking adventure (but not food poisoning) can see health inspection scores along with reviews while browsing for restaurants on Yelp.

In Louisville, Kentucky, asthma patients can sign up for “smart inhalers” to help the city map where asthma attacks are most common, discover the triggers and shift policies for cleaner air.

And in New Orleans, city residents can visit a site called BlightStatus to track blighted properties in their neighborhood and look for property code violations.

Across the country, efforts like these are awakening cities to the potential of open data as a way to transform citizens’ experiences with government and to improve both policymaking and performance. Seizing on this momentum, Bloomberg Philanthropies recently launched a $42 million initiative – What Works Cities – to help 100 mid-size cities get better government through data. Already, more than 100 cities have applied.

Continued at the Washington Monthly…

Ending Banking Deserts in Texas

“Banking development districts” and “savings lotteries” could help more Texans open and use bank accounts.

In the parts of Dallas known as South Dallas and West Dallas, west of the Trinity River, many neighborhoods could rightly be called “banking deserts.”

“You see a handful of bank branches, a Chase drive-through or an ATM kiosk in a strip mall,” says Texas State Rep. Eric Johnson, whose district includes these areas. “You don’;t see any – or very few – of the smaller community banks or credit unions.”

But what these neighborhoods do have in abundance, says Johnson, are what he calls “lower-tier” financial services providers: payday lenders, title lenders, pawn shops, and check cashers.

Dallas is, in fact, among the most “unbanked” cities in America, and Texas is among the most “unbanked” states. According to the Federal Deposit Insurance Corporation (FDIC), more than one-third of Dallas-area households – about 36 percent – either have no bank account at all or rely mostly on check cashers and other non-bank providers for financial services. These households are what the FDIC calls “unbanked” and “underbanked.” Statewide, nearly 4 in 10 Texas households – or about 38 percent – fall into one of these categories, compared to about 27 percent nationwide.

But Texas might now be on the path to reversing these trends. In May, Johnson successfully led the passage of legislation that could put Texas at the forefront of improving access to mainstream financial services. Better access to banks, Johnson hopes, would also mean better access to mainstream financial products such as home mortgages, small business loans and lower-cost consumer credit – all of which are in short supply in many parts of Dallas and Texas.

Continued at the Washington Monthly…

It’s hard to be a moderate politicians. It’s also expensive

Moderate candidates pay a heavy “centrist premium” to win and keep their seats.

Via the Washington Post

It’s tough to make it as a moderate in Congress these days.

Across the country, competitive purple districts have been gerrymandered into oblivion, replaced by seats that are safely red or blue. Activists at both extremes show no mercy toward elected officials who venture to advocate compromise. Even former House majority leader Eric Cantor — hardly moderate — fell victim to a 2014 primary challenge from a tea-party-backed opponent after his immigration stance ran afoul of the GOP’s far right wing. But perhaps most prohibitive: Being a moderate costs far more than being extreme. And the increasing expense means most moderates can’t compete.

Consider the case of Democratic members of the House, where long-standing, self-defined coalitions — New Democrats and Blue Dogs on the one hand and the Progressive Caucus on the other — separate moderates and liberals with reasonable clarity. (Members must apply to join, attend regular meetings and remain in good standing.) In the past three election cycles, self-described moderate lawmakers spent roughly twice as much as their liberal counterparts to win or defend their seats.

In 2014, for example, direct spending by members of the moderate New Democrat and Blue Dog coalitions averaged $2.01 million per campaign, according to an analysis of data derived from OpenSecrets.org, the site of the Center for Responsive Politics. In contrast, members of the liberal Progressive Caucus each spent an average of $1.07 million on their races.

This disparity is even more extreme — greater than 3 to 1 — when all campaign spending is included. Counting spending by opponents and outside groups, the average campaign in a New Democrat or Blue Dog district cost $5.2 million in 2014, compared with an average of $1.57 million in Progressive Caucus districts.

And as ideological partisanship increases, this centrist premium is growing. For every dollar that the average Progressive Caucus member directly spent to defend his or her seat in 2014, the average moderate lawmaker spent $1.93. By comparison, moderates shelled out $1.54 for every campaign dollar spent by liberals by 2012 and $1.65 in 2010.

 

Continue reading at the Washington Post.

Financial Volatility Is the New Normal for American Households

New research finds most Americans are unprepared to weather a financial crisis.

Standard financial planning advice presumes that financial emergencies – the loss of a job, an illness or accident, or an unexpected car or household repair – are relatively infrequent for most households. But new research shows that many American households live in a constant state of financial uncertainty, experiencing major monthly swings in their income and expenses.

A recent report from the JPMorgan Chase Institute, which analyzed a sample taken from 2.5 million accounts, finds that volatility is the norm, even at higher incomes. According to the study, as many as 89 percent of Americans see their incomes fluctuate by more than 5 percent from month to month, while 60 percent see changes in spending greater than 30 percent from month to month. Moreover, these figures are roughly the same across all income levels.

Continued at the Washington Monthly…

It’s hard to be a moderate politician. It’s also expensive.

It’s tough to make it as a moderate in Congress these days.

Across the country, competitive purple districts have been gerrymandered into oblivion, replaced by seats that are safely red or blue. Activists at both extremes show no mercy toward elected officials who venture to advocate compromise. Even former House majority leader Eric Cantor — hardly moderate — fell victim to a 2014 primary challenge from a tea-party-backed opponent after his immigration stance ran afoul of the GOP’s far right wing. But perhaps most prohibitive: Being a moderate costs far more than being extreme. And the increasing expense means most moderates can’t compete.

Continued at the Washington Post…