Sep 23 2014
Two simple income-tax brackets: 15% and 35%. End the marriage penalty and increase the child tax credit
Senator Mike Lee and Senator Marco RubioToo many Americans believe the American dream is slipping away for them and their children. They see their cost of living rise while their paychecks remain stagnant. They see an economy that benefits stockbrokers but not stock clerks. They see the ladder of economic opportunity being pulled farther up and out of their reach.
One of the most disheartening trends in America today is the steep and relentless increase in the cost of higher education. As almost everything else in our economy has gotten better and more affordable, tuition at public four-year colleges has nearly quadrupled since 1982.
The hardest hit by these skyrocketing costs are middle-income families who struggle to pay those prices out of pocket but don’t qualify for needs-based assistance. Meanwhile, the changing economy is making post-secondary education more important than ever.
Today, most students and families’ only option is federal student loan programs, which offer some temporary relief but lead to decades of debt. And for students who never acquire the skills necessary to succeed in today’s economy—because they leave college early or because they pursue a major that doesn’t prepare them for the job market—this debt can become overwhelming.
So far, the federal government’s only response to this catch-22 is to marginally reduce the interest rate on student loans.
But instead of asking how Congress can help students pay off exorbitant loans, we should ask how Congress can reduce the cost of higher education so students won’t have to go so far in debt.
It all starts with recognition of two important facts. First, in today’s society, getting a four-year college degree is not the only way to obtain the knowledge and skills necessary to start a successful career. For many students, apprenticeships or occupational training programs make more sense than a bachelor’s degree.
Second, in recent years educational entrepreneurs and innovators have used new technology to redesign the traditional educational model—through online courses, for instance—making post-secondary cheaper and easier than ever before.
Unfortunately, federal law ignores both of these facts. Our current system makes it harder and more expensive for students to access alternatives to the traditional college track. The primary roadblock facing these students is our outdated, inefficient accreditation system, which is made up of various non-governmental agencies that determine which educational institutions or programs are eligible for federal student-loan money.
Under current law, students can access federal loans and grants only if they attend schools that are officially “accredited.” But for a school or occupational training program to acquire this stamp of approval—and thus be able to admit students who are paying their tuition bills with federal loans—it must go through a review process conducted by faculty members of already-accredited schools.
This is a classic case of the regulated becoming the regulators. Expensive degree-issuing colleges and universities get to decide who joins their elite club, and they have a strong financial incentive to lock out new, more affordable educational models that could be a better match for some students.
This lack of competition is a primary driver of rising tuition, which gives too many students an impossible choice—crippling debt or limited opportunities.
We believe there is a better way.
We have introduced the Higher Education Reform and Opportunity Act in both the House of Representatives and the Senate. The HERO Act will allow states to experiment with their own accreditation systems. Under our plan, states could choose to accredit alternative education providers such as apprenticeships, specialty schools, professional certifications, all the way down to individual courses. This way, students who have been locked out of the current system would be able to use federal student loans and grants to gain access to the skills they need at lower prices on a schedule that works for them.
Our reforms don’t touch the traditional accreditation system, which works well for existing universities. It creates a new, parallel system that opens doors for the millions of low- and middle-income and non-traditional students the current system leaves behind.
Many would benefit from education alternatives to traditional brick-and-ivy institutions, and we owe it to our students to give states the opportunity to develop these options. The HERO Act is an important first step towards ensuring that higher education is affordable and accessible and gives our students the resources, skills and education to succeed.Op-ed originally published on The Daily Signal
May 05 2014
Today America faces a large and growing Opportunity Deficit. Up and down our once-flourishing economy, a new and unnatural sclerosis is taking hold. For millions of working families of or aspiring to the middle class, the American Dream is slipping out of reach.
This Opportunity Deficit presents itself in three principal ways: immobility among the poor, trapped in poverty; insecurity in the middle class, where families just can’t seem to get ahead; and cronyist privilege at the top.
On the first two fronts there is some good news. A new generation of conservative leaders is emerging to meet these growing challenges. These reformers understand that it’s not enough to just cut big government. To restore equal opportunity to all Americans, we also have to fix broken government.
That’s why they have already proposed a range of principled, positive reforms to repair our welfare, prison, job-training, tax, energy, and education systems.
But as crucial as this work is, it remains incomplete. Compounding lower-income immobility and middle-class insecurity is America’s crisis of crony capitalism, corporate welfare, and political privilege, in which government twists public policy to unfairly benefit favored special interests at the expense of everyone else.
From subsidies and loan guarantees to tax loopholes and protective regulations, cronyist policies come in a variety of forms, but they all work in the same way: making it easier for preferred special interests to succeed, and harder for their competitors to get a fair shot.
In a cronyist economy, economic power is redistributed, not from the rich to the poor, but from the politically disconnected to the politically well-connected. Profits come from serving congressmen instead of customers, and the innovation and opportunity that define free enterprise start to sag.
In such an economy, increasingly built on connections instead of competitiveness, it’s no wonder we see record corporate profits and jaw-dropping gains among elites, but slow growth, stagnant wages and limited opportunities for everyone else.
Given the scope and consequences of America’s Opportunity Deficit the only option for conservatives today is a clear and simple zero-tolerance policy toward cronyist privilege of any kind.
With deep roots and powerful friends, the policies that contribute to America’s Opportunity Deficit will certainly not fix themselves.
That’s why those same reform-oriented conservatives in Congress have already begun to write and advocate for an anti-cronyist agenda—from Rep. Paul Ryan’s work to strip special-interest privilege from the budget, to Senator Rand Paul’s regulatory reform that would improve federal agency accountability, and Rep. Mike Pompeo’s bill to end federal subsidies in the energy sector.
I am also working with Senator Marco Rubio on a pro-family, pro-growth tax reform proposal to eliminate special-interest privilege from the corporate code and level the playing field for small and large businesses.
This new anti-cronyist Conservative Reform Agenda, while still a work in progress, is an exciting development. For too long Republicans have been complicit in the proliferation of cronyist policies. If we are to win back the trust of the American people—and we must—a zero-tolerance policy toward special-interest privilege has to be our starting point.
Moreover, eliminating cronyist privilege is essential to get the economy growing again by creating opportunity and driving down the inflated costs of many of the staples of middle class aspiration and security: housing, education, health care, and child-rearing.
Anti-cronyist reform should never be confused with the cheap, ugly populism of class warfare. We want successful Americans to succeed. All we ask is that they earn their success on a level playing field, subject to the judgment of the market – as truly successful Americans always have.
A conservative agenda to get right on cronyism will be good for the economy, good for the country, and, above all, the right thing to do.
May 01 2014
Most Americans know that our revolutionary history began when a handful of brave patriots tossed crates of tea into Boston Harbor to protest unfair taxation. But what they might assume incorrectly is that our forefathers did so in response to increased taxes.
In fact, the Tea Act of 1773 actually lowered taxes on imports. What truly offended the colonists was that it only lowered them for one corporation, the politically connected East India Company, giving it an unfair, artificial advantage over smaller, local American competitors.
Thus, not only was the American idea hatched in protest to a government that was too big and too intrusive, but also protesting a government that was willing and able to unfairly benefit favored special interests at the expense of everyone else.
Today, it’s commonly known as “cronyism” and represents a uniquely malignant threat to American exceptionalism.
Cronyism simultaneously corrupts our economy and our government, turning both against the American people. It forces American families who “work hard and play by the rules” to prop up, bail out, and subsidize elite special interests that don’t. It empowers and enriches the few by disenfranchising the many.
Like a black hole, cronyism bends the economy toward the state, inexorably shifting wealth and opportunity from the public to policymakers.
The more power government amasses, the more privileges are bestowed on the government’s friends, the more businesses invest in influence instead of innovation, and the more advantages accrue to the biggest special interests with the most to spend on politics and the most to lose from fair competition.
But once profits depend on serving congressmen instead of customers, the interests of the elite diverge from those of the nation.
Cronyism has created a warped economy, increasingly built on connections instead of competitiveness. We see corporations posting record profits and jaw-dropping gains among elites, but slow growth, stagnant wages and limited opportunities for everyone else. Except, of course, in the Washington, D.C. area, home to six of the ten wealthiest counties in the United States.
That is not to say that anti-cronyism should be equated with – or descend into – the cheap, ugly populism of class warfare. We want successful Americans to succeed. All we ask is that they earn their success on a level playing field, subject to the judgment of the market – as truly successful Americans always have.
Cronyist policies come in many shapes and sizes, but the upshot is always the same: making it easier for favored special interests to succeed and harder for their competitors to get a fair shot.
There are direct subsidies, like those that are supposedly necessary to protect family farmers but overwhelmingly go to the top 10% of recipients.
There are also indirect subsidies, like the loan guarantees issued by the Export-Import Bank, which unnecessarily risk taxpayer money to subsidize well-connected private companies that are perfectly capable of securing private financing anywhere in the world.
There are complicated tax code carve-outs and loopholes, as well as complicated regulations, which are all tools the government uses to collude with big business to erect giant walls that guard against free-market competition.
And then there is Obamacare, truly a cronyist virtuoso’s masterpiece.
The president’s signature achievement privileges certain corporations by penalizing Americans who don’t buy health insurance from them, subsidizes the purchase of those products, protects those corporations from true price competition and market innovation, exempts special interests like labor unions, government employees, and large corporations from various mandates under the law, and may even guarantee those corporations’ survival — even if they lose money — through an open-ended taxpayer bailout.
Cronyist policies violate the conservative principles of free enterprise, equality of opportunity, and the rule of law. It’s time we stand up for economic fairness and fight back against special-interest privilege.
For three years now, establishment leaders have challenged anti-establishment conservatives to accept political reality, engage the politics of addition, and produce a viable plan to make principled conservatism appealing and inclusive — to grow our movement into a majority.
Well, here it is: a commitment to economic fairness and competition at the top of our economy to help restore jobs, growth, mobility, and opportunity to the poor and middle class.
There is a direct line from our forefathers on Griffin’s Wharf in Boston Harbor to where we stand today. They had the courage to challenge a government that was too big and too intrusive, but also unfair. The result was the creation of an America of, by, and for the people. Our challenge today is to reclaim it.
Apr 07 2014
Republicans should take a stand against corporate welfare
Mar 25 2014
Feb 07 2014
Like most Americans, I support the ability of individuals to collect unemployment insurance for a limited amount of time. But in order to start solving the problem of long-term unemployment, this debate has to begin addressing the president’s broken policies that are making it more difficult to find work.
By historical standards, employment should be returning to the U.S economy at a much faster rate. On average, it took just over two years to recoup every lost job in each recession following the Great Depression. But five years after the 2008 recession began, the Obama recovery still has fewer jobs than before the downturn. In particular, private-sector job growth has lagged, creating an Obama “job gap” of more than 4.5 million jobs, according to the Joint Economic Committee.
By repeatedly supporting policies that have killed jobs and rejecting proposals that would have created them, the president has forced more Americans to need unemployment insurance for longer periods of time. The administration’s “solution” is to just keep people trapped in these programs without doing anything about the causes of long-term unemployment.
The truth is that government policies are causing long-term unemployment, creating barriers for low-income Americans to work their way into the middle class, locking millions of Americans in poverty traps, and preventing families who are barely making it from getting ahead. These policies unintentionally discourage almost every positive step underprivileged families can take toward social mobility and economic security.
Now is the time for a new, comprehensive anti-poverty agenda that not only corrects but transcends existing policies that cause immobility among the poor and long-term unemployment.
In an 1861 address to Congress, Abraham Lincoln said the “leading object” of American government was “to elevate the condition of men — to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life.”
In a single sentence, Lincoln explains precisely what poverty is and what government ought to do about it. Lincoln knew that true poverty was not for most people an absence of money, but an absence of opportunity.
Then, as now, people were not isolated because they were poor; they were poor mostly because they were isolated. And so, in America’s original war on poverty, government did not give the poor other people’s money. It gave them access to other people.
In Lincoln’s era, that meant dredging rivers, building canals, cutting roads, the Homestead Act and land-grant universities. These public goods didn’t make poverty more tolerable, but more temporary. They reduced the time it took to get products to market and increased the speed at which knowledge could be developed and shared.
In the same way, Americans today do not lack the ability to acquire the knowledge and skills necessary to flourish. But they absolutely lack the same access to the networks of human opportunity where that knowledge and those skills are acquired.
Utah can provide a good example for the rest of the country. A combination of smart, efficient government, an active and faithful civil society and perhaps the most successful private welfare system in the world has made Salt Lake the most upwardly mobile region in the country. And we have one of the lowest unemployment rates in the country to show for it.
That’s why I have begun and will continue to pursue a reform agenda in Washington that begins to lift the artificial weights imposed by government. It includes streamlining our current welfare system so people can work their way into the middle class and stay there. Other reforms give more flexibility to state and local officials in our Medicaid and Head Start programs, refine prison sentencing to reunify communities and families, eliminate inequities in the tax code that hurt parents, and make higher education more affordable and accessible to low-income students.
Unemployment insurance can be a useful tool if it is used as a limited backstop. But extending unemployment insurance indefinitely is not a replacement for fixing the root causes of long-term unemployment and poverty. We need an agenda that connects people, fosters civil society and free markets, and gives Americans access to real, lasting opportunities.
To create jobs, promote access to opportunity via human networks was originally published in the Deseret News
Jan 16 2014
We don’t need to dump our higher education system – we just need to open it up to more students and teachers
The challenge of American higher education policy today is reconciling two seemingly contradictory facts.
First, higher education is more important to economic opportunity and middle-class security than ever before.
And second, the standard credential of higher education – the bachelor’s degree – is being devalued by the diminishing quality and exploding costs of undergraduate education.
How is it possible that higher education is becoming more valuable and a bachelor’s degree less? Because they aren’t the same thing.
American workers need post-secondary knowledge and skills. But a four-year (or five- or six-year) sojourn at a brick-and-ivy residential institution is not the only way to get them. Indeed, it’s not the way that most Americans get them.
There are vocational schools and professional training programs. There are apprenticeships in the skilled trades. There are hybrid on-campus/on-the-job models. There is the bourgeoning promise of distance learning options, like Massive Open Online Courses.
Unfortunately, this innovative, alternative market is being hamstrung by federal policy governing higher-education accreditation.
Under the federal Higher Education Act, students are eligible for Title IV student loans and grants only if they attend formally accredited institutions. That makes some sense, for purposes of quality control. Except that under the law, only degree-issuing academic institutions are allowed to be accredited. And only the U.S. Department of Education gets to say who can be an accreditor.
That is, the federal government today operates a kind of higher-education cartel, with federally approved accreditors using their gatekeeper power to keep out unwanted competition.
This closed, subsidized market has helped spur runaway inflation, which has made it impossible for all but the wealthiest students to pay their own way. So Washington’s offer to most high school graduates is: go tens of thousands of dollars into (non-dischargeable!) debt to pursue an over-priced degree, or spend the rest of your life locked out of the middle class.
This system works perfectly well for top-tier colleges and the affluent teenagers they tend to admit.
For everyone else, not so much. For marginal students, victims of social promotion, young single parents, or families who don’t want their kids saddled with debt at 22? For innovative and entrepreneurial teachers? For businesses and labor unions looking for in-demand skills?
For them, the current system doesn’t work – it works against them. However unintentionally, Washington is pricing most Americans out of the post-secondary opportunities that make the most sense for them, and plunging most of the rest deep into debt to pursue an increasingly nebulous credential.
Most progressives think ever-more taxpayer assistance will make up for any policy dysfunction. But we’ve tried that, and all we’ve done is inflate a bubble.
It seems to me the answer isn’t more funding or lower rates for existing Title IV programs. The answer is to make more kinds of students and more kinds of education eligible for them.
So last week, I introduced legislation to do just that.
The Higher Education Reform and Opportunity Act would give states the power to create their own, alternative systems of accrediting Title IV-eligible higher education providers.
State participation would be totally voluntary, and would in no way interfere with the current system. State-based accreditation would augment, not replace, the current regime. (College presidents can rest assured that if they like their regional accreditor, they can keep it.)
But the state-based alternatives would not be limited to accrediting formal, degree-issuing “colleges.” They could additionally accredit specialized programs, apprenticeships, professional certification classes, competency tests, and even individual courses.
Nor would states be limited to authorizing traditional accrediting agencies. Businesses, labor unions, trade associations, non-profit groups, and any other applicant that met the state’s requirements could be empowered to accredit.
Under state accreditation, higher education could become as diverse and nimble as the job-creating industries looking to hire.
Authorized businesses could accredit courses and programs to teach precisely the skills they need for their employees. Apple or Google could accredit computer courses. Dow could accredit a chemistry program, and Boeing could craft its own aerospace engineering “major.”
Unprepared high school graduates could get loans to either acquire basic professional skills, or start to pursue the academic education their dysfunctional school boards and teachers’ unions denied them.
Workers whose life circumstances make it impossible to take more than one course at a time – single parents, perhaps, or those working two jobs – could finally be eligible for Title IV funds.
Meanwhile, talented teachers could side-step time-consuming and esoteric “publish or perish” research, and spend their careers in the classroom instead. Groups of professors could form new business models, like medical practices, and offer high-quality higher education for a fraction of the cost of four years at a traditional university. Finally competing on a level playing field, new options like MOOCs could finally find their markets.
Institutions of civil society could play a role, too. Non-profit groups like the U.S. Historical Society, the Sierra Club, or the Mayo Clinic could accredit programs in their respective fields, or even competency-measuring exams for various courses.
Think of the proliferation of opportunities. Faith communities and civic organizations could begin to offer accredited courses, for next to nothing, as part of their missions. Qualified individuals could make teaching higher education their form of community volunteering.
After all, the retired mechanic down the street and the stay-at-home mom with the masters degree, and the Civil War re-enactor with encyclopedic knowledge of military history are all potential teachers sitting on the sidelines. Alternative accreditation could get them into the game.
We already know that people other than tenured academics can teach college-level material, because adjunct professors, teaching assistants, and high school Advanced Placement teachers do it every day.
And we already know credentials other than the B.A. work perfectly well in fields that use them (for example, the CPA exam, the Series 7, or journeymen exams in the skilled trades).
Everything we know about education and professional training in our diversifying economy says it’s time to decouple Title IV eligibility and enrollment at degree-issuing institutions. There are too many valuable opportunities and invaluable people the current policy excludes.
My bill begins that process. How might it help?
In state-accredited higher education markets, alternative providers would have to price-compete with their traditional and alternative competitors. Among other benefits of quality and efficiency, disciplined pricing would mean students might need loans of hundreds of dollars, instead of tens of thousands.
Providers will have to market their teaching excellence – only the best teachers will earn their keep.
They will have to build up their brand reputations quickly – so they’ll be conspicuously transparent about their students’ success and employment rates and income levels, probably with third-party verification. That will give providers enormous incentive to help their students truly learn, as those who can’t won’t stay in business.
As the alternative market establishes student/customer-friendly standards for pricing, quality, and transparency, traditional colleges will face tough questions about rigor, transfer credits, and student success.
Less-competitive colleges in particular, with weak academics and scandalous graduation rates, will have to step up or go under.
Some reformers might want to go even further – to open up the market with a national system based in Washington, or blow up the status quo altogether.
But housing alternative accreditation in the states accomplishes three conservative goals at once. It will protect policy innovation from the monolithic cronyism that inevitably infects centralized power. It will allow competitive federalism to work its magic, as neighboring states check one another’s imprudence and inaction. And, finally, it will preserve and reward what does work at today’s colleges and universities.
It is wrong to say America’s higher education system has “failed.” It has succeeded beyond any reasonable expectation. Our best colleges are the best colleges anywhere – that’s why students from around the world come here to study.
But that system – and especially the federal policies that govern access to it – is failing the two-thirds of Americans who never get a B.A., and the large minority of Americans who never set foot on a college campus.
Those Americans need access to skills that current colleges aren’t teaching, at prices that four-year residential institutions can’t afford, on timelines the academic calendar can’t accommodate. And the lower a student’s income, the greater the need.
In today’s customizable world, students should be able to put their transcripts together a la carte – on-campus and online, in classrooms and offices, with traditional semester courses and alternative scenarios like competency testing – and assistance should follow them at every stop along the way.
We don’t need to dump our higher education system – we just need to open it up to more students and teachers.
So instead of eliminating our current accreditation regime, my bill would simply allow 50 new ones to compete with it, and each other – with enough quality control to protect students and taxpayers, and enough flexibility to incentivize experimentation and innovation.
The point of higher education policy should be to make it easier and more affordable for good teachers to teach, willing students to learn, the economy to grow, and civil society to flourish. State-based accreditation reform can help on all four fronts.This op-ed, New School: A Plan for State-Based Accreditation of Alternative Higher Education, was originally published in The Federalist.
This year, however, without warning or cause, Senate Majority Leader Harry Reid refused to allow for adequate debate or an open process for amending the legislation, breaking an important tradition that has been one of Congress’s few bright spots in recent years.
In the past decade, regardless of which party was in power, the NDAA has been considered in the Senate for an average of nine days with an average of 130 amendments considered each year. But this year, after just two days of considering the bill and voting on only two amendments, Reid filed a motion to end debate on the legislation and block any other senator, Republican or Democrat, from offering further amendments.
This is a dangerous and unnecessary new precedent to set when it comes to our national security. As a member of the Senate Armed Services Committee, I recognize the importance of giving this bill full and open consideration. It authorizes more than $600 billion in spending for the next year and enacts policies that touch every part of our national security apparatus. The NDAA identifies our security priorities, such as new and emerging threats, and ensures we have the resources to keep our service members safe.
Refusing to allow the normal debate process to work as it has for almost five decades violates the rights of the American people to have this legislation debated and amended through their elected officials.
I filed several amendments in November and co-sponsored others that, in previous years, would have received consideration. For example, the Due Process Guarantee Act, which I offered with Democratic Sen. Diane Feinstein of California, is a bipartisan amendment that guarantees due process for American citizens. That measure passed by a supermajority, 67 votes, on this same authorization bill last year. With such overwhelming support, there is little reason why it could not be considered this year.
My colleagues had other amendments dealing with issues such as the National Security Agency, sanctions against Iran, and sexual assault in the military — all important issues that need to be addressed in this bill.
Much like the “nuclear option” change to Senate rules in November, Reid’s refusal to allow amendments to the NDAA this year serves no other purpose than to stymie the rights of the American people to have their voices heard on important legislation through their elected officials.
As a result, I cannot vote to support this legislation until my colleagues and I are allowed to debate and amend it in a way that respects the normal democratic processes that have worked well for almost 50 years. This bill is too important to the security of the United States, and to military communities like the one supporting Hill Air Force Base, to allow it to move through the Senate without due consideration.
I commend my colleagues in the House of Representatives, whose leadership carved out the appropriate amount of time in their schedule this summer to give this important legislation the consideration it deserves.
I would very much like to see a Defense Authorization bill pass annually that addresses the pressing concerns of our military and enacts policies that enhance our nation’s security and protects the lives of service men and women and their families. The only way to do this is through an open amendment process that allows all members of the Senate to participate and press legislation on behalf of their constituents. To do otherwise is harmful to both our armed services and the democratic institutions they are charged with protecting.