One of the great parts of being at Brookings has been the many champions of government reform in the US and around the world who have reached out to visit us here, meet me and my colleagues, and talk about how best to transform government and make it work better for people. The latest was MK Erel Margalit, who before joining the Israeli Knesset started a leading venture capital firm in Israel (and was the first Israeli to make the Forbes Midas list of top tech investors globally). My Brookings colleagues, including Elaine Kamarck, Bill Galston, Natan Sachs and John Hudak talked with MK Margalit about the lessons he learned in the private sector, and about his efforts to bring those lessons to his work in government. 

Coming not long after our meeting with Czech Deputy Prime Minister and Finance Minister Andre Babis, who enjoyed similar success in business and has ambitious reform goals of his own informed by his business career, it was fascinating to talk about what does and does not translate to the government sector. MK Margalit’s focus includes supporting peace and economic development by developing enterprise zones in and around Israel that encourage economic partnerships between Jewish and Arab Israelis and their businesses, and that include Palestinians as well. It was an impressive melding of business and government methodologies. The meeting built on similar ones we have had with other innovators including CFPB Director Rich Cordray, former Mayor and Governor Martin O’Malley, and of course DPM Babis, all of whom have in common innovating to make government function more effectively.

Editor's Note: On Thursday Brookings Visiting Fellow, Amb. Norm Eisen addressed the Italian Parliament to discuss ethics in government, highlighting efforts in the US to improve transparency and accountability. In the speech, Amb. Eisen argues that while ethics reform can be difficult, it is an absolutely essentially part of any democratic system.

As Prepared For Delivery

Signora Presidente Boldrini, Madam President Brasseur, honorevoli Parlamentari, fellow panelists and distinguished guests, buon pomerigo. Thanks for inviting me to address the urgent subject of ethical standards in political life. It is an honor to be here in the Italian Chamber of Deputies, in this beautiful and ancient city, to which we Americans owe so many elements of our system of government. And in my town of Washington, DC we also borrowed a lot of your architecture, so we owe you for that as well.

In exchange for all that, as a small form of repayment, I would like to offer some perspectives from the U.S. as you consider the adoption of a code of ethical conduct for the Italian Parliament.

Since we are in the Chamber of Deputies, the equivalent of our U.S. Congress’ House of Representatives, I will start with best practices in that body, based on years of my professional life—too many—spent addressing alleged violations of its codes of conduct, including as a defense lawyer and later as the co-founder of a government watchdog group.

And I think there are also important lessons to be drawn from the new, innovative code of conduct for White House officials we established while I served as the "Ethics Czar" of President Obama. At his direction I helped write that new code, the Obama "ethics pledge," and although I am biased I think it has been effective so far, knock wood, there have been no major White House scandals. So I will talk about the lessons of that code of conduct a bit as well. My reflections are those of a friend and partner nation with plenty of challenges of our own. So I approach the issue with genuine humility in sharing our successes and failures.

I. Government ethics while standing on one leg

So—what is our U.S. view of best practices for the contents of government codes of ethics? In the U.S. and dare I say internationally, there is a pretty well developed set of best practices. In our House of Representatives, for example, our equivalent of this Chamber of Deputies, Rule XXIII is the Code of Official Conduct. It provides rules in four core areas;

• one, for regulating conflicts of interest, that is, situations where personal interests or financial holdings may conflict with official parliamentary duties;
• two, for gifts, particularly those from lobbyists and other persons interested in parliamentary decisions;
• three, for outside employment of parliamentarians before, during and after government service, particularly with lobbyists, a situation which we call in the US the revolving door; and
• four, for parliamentarians’ proper use of official resources, that is, hiring, staff, budget, travel and such.

There is much more detail in our code of conduct, and a few other rules as well, but those four items—conflicts, gifts, employment and resources—are the key. These same four key areas are also at the center of our codes of conduct for employees of our executive branch, as codified in our statutes and regulations, as well as in the Obama ethics pledge.

I emphasize these four key items because, having helped draft one code of conduct, and having often delved into many other codes, I sometimes find that I lose the forest for the trees when working with these codes, that the priorities at least for me sometimes get lost in the detail. So I try to keep the core always in mind, though I should add that the content of any such code must of course be particularized for the circumstances of particular government bodies and jurisdictions. Thus our U.S. House code is five pages long, elaborating on those four core items, and the House Ethics Manual of official guidance for the code is 456 pages long. Our Obama ethics pledge we got onto one page, we were proud of that. And we made everyone read and sign that page. To be fair, we could do that because we built on and added to other rules which already existed, and we did have several pages of definitions and references attached to the pledge.

II. Enforcement and transparency

But a good code is only the beginning. In our U.S. experience, just as important as the code, maybe even more important, is its enforcement. And here is where I want to share some lessons drawn from U.S. challenges in recent years, and how we responded. I am going to add two more items to our check list: enforcement and transparency.

Candidly, even with our parliamentary code of conduct in the U.S., our enforcement has sometime lagged. That is in part because under our Constitution, the ultimate enforcers are the parliamentarians themselves, and so they can at times be understandably reluctant to sanction their colleagues and friends. It's human nature.

For example, from about 1998 to 2004, there was a seven-year truce in filing complaints in our House of Representatives. The government watchdog organization I co-founded helped end that in 2004 by writing a complaint together with a brave but lonely member of Congress who was willing to file it with the House Ethics Committee. The resulting investigation resulted in the discipline of the member investigated, and ultimately helped lead to his party losing majority control of the body.

Out of all of that came a new enforcement tool in 2008, in our House of Representatives, that I strongly recommend to you: the creation of a new, independent entity, the Office of Congressional Ethics (OCE). This is a nonpartisan fact-finding body that investigates allegations from any source, including whistleblowers who might otherwise be afraid to step forward. OCE then recommends action to the parliamentarians who constitutionally maintain the ultimate decision-making power. Most importantly, the OCE referrals become public, allowing press, civil society and voter accountability. As a result, I believe, since the creation of the OCE for our House in 2008, there have been a significantly higher number of meritorious investigations there than in our Senate, which does not have a comparable body. The total is about 46 OCE referrals and about 20 House disciplinary actions versus just four letters of admonition by our Senate in that period. To be fair the Senate is a smaller body—but not that much smaller!

That last aspect of OCE enforcement—transparency, and the accountability it brings from media, NGOs and the public—is the sixth and final point I want to emphasize. In our U.S. parliamentary ethics system we have many transparency mechanisms: asset disclosures that our parliamentarians file, disclosures that lobbyists must make about their activities, information in campaign finance filings, and more.

To explain the value of transparency, I would like to close by turning to one of our Obama White House ethics transparency innovations. Starting in 2009, we for the first time put on the Internet virtually all visitor records of those coming to the White House. It used to be that just to get a handful of these records you had to file litigation and wait for years to know who was coming to the White House, who they were meeting with and what the subject of the meeting was. Now millions of Obama White House visitor records are online, each with a dozen or so basic categories of information: the name of the visitor, the person visited, the subject of the meeting and so on.

Why is that important? I began by referencing the Obama White House's record in avoiding major scandal. I think there are a number of reasons for that, including the President's own integrity and the new code of conduct we put into place. But an important part of that success story has also been the fact that records of White House meetings go on the Internet for everyone to see. That transparency brings accountability from the press, civil society and the public. That transparency and accountability has in turn powerfully reinforced the code of conduct: it has discouraged people from having meetings they shouldn't have, and if you don't have the meeting, you can't get in trouble for it.

So the U.S. view in one sentence: regulate conflicts, gifts, employment, and resource use, with strong enforcement and above all transparency. Thanks again for inviting me to share the U.S. perspective. Grazie!

Editor's Note: In September of this year Visiting Fellow Norman Eisen was featured in the Council on Government Ethics Law (COGEL) members-only magazine, The Guardian. An abbreviated version of his interview is featured below.

Interview conducted by Wesley Bizzell, Assistant General Counsel, Altria Client Services LLC.

Recently, you addressed the Italian Parliament to discuss ethics in government, as that legislative body considers adopting its own code of ethical conduct. In that speech, you noted you believe there are four key concepts at the center of Federal U.S. ethics laws. What are those four concepts and why they are important?

Firstly, I’d like to note the importance of focusing on four concepts. The House of Representatives Ethics manual is 456 pages long; too long to be of any real use in creating an ethics system. Instead, these four principles serve as a foundation upon which different governments can build their own sets of rules based on their own unique needs.

I focused on just four to make a point about priorities. The first is “conflicts”—that is, problems that arise when an individual’s personal interests and parliamentary duties may be at odds with one another. The second is “gifts”. Even if there isn’t an explicit quid-pro-quo style agreement involved, when a political figure accepts a gift from someone with a demonstrated interest in government decision-making, the suspicion of misconduct will always be there. “Revolving door” is the third core concept. When individuals rotate from the private sector to the public sector over and over again, they are naturally going to form relationships that tempt them toward unethical behavior. Finally, “use official resources.” Officials must be careful to use official resources only for official purposes, being particularly careful not to conduct any campaign activity on the taxpayer’s dime. The goal with these four priorities is not only to keep people from behaving unethically, but also to make sure it doesn’t seem like anyone is doing anything unethical either.

In that speech, you said that focusing on these four areas keeps you from losing the forest for the trees when working with ethics codes. Can you elaborate on that?

There’s always a danger for members of the executive branch, because the system of rules and regulations that governs ethical behavior is itself so complex. When it’s imbedded in equally complicated and overlapping sets of statute you risk creating rules so specific that they’re practically useless. The same is true in the legislative branch and I dare say in the federal judicial branch, as well as at the state and local levels. You’re always on the edge of being lost in the minutiae.

In fact, you can often make wrong decisions if you focus in too much on the specifics, because you lose sight of the larger picture that guides the rules. There are always options in ethical dilemmas, and the big picture needs to be kept in focus.

While at the White House serving as Special Counsel to the President for Ethics and Government Reform you oversaw numerous significant changes in the area of open government—including helping craft and implement President Obama’s Open Government Directive; publishing White House visitor logs on the internet; and generally improving the Freedom of Information Act (FOIA) process. What change in the area of open government are you most proud?

I was struck when we began the interview by the list of topics—campaign finance, lobbying, ethics, elections, and FOIA issues—because all of those were part of my portfolio as Special Counsel to the President for Ethics and Government Reform during the first two years of the Obama administration. I would have to say that I’m most proud of my role in the President’s decision to put all of the White House visitor records on the internet.

Remember, in previous administrations, Democratic and Republican alike, plaintiffs had to litigate for years just to get a handful of visitor records. To have all of the visitor records on the internet, categorized into various types, opens access to the White House to an unprecedented degree. There are now over four-and-a-half million visitor records available on the White House website, with more added every month. I think that that is remarkable.

Truthfully, I was torn between that accomplishment and a second one, which is that the President and his staff in the White House have had the longest run in presidential history (knock on wood) without a major ethics scandal or a grand jury investigation, indictment, or conviction. I was tempted to list that second fact as the accomplishment of which I was most proud. But it occurred to me that the death of White House scandal is actually a function of the exceptional level of transparency that the visitor records represent. Transparency helps ensure people don’t have meetings they shouldn’t be having, which keeps them out of trouble. So I’ll offer that second accomplishment as a part of the first one.

In your view, what was the most significant lobbying and ethics reform during your tenure at the White House?

No doubt about it: reversing the revolving door. Craig Holman of Public Citizen, who studies these issues, says we were the first in the world to create a reverse revolving door. I think it is absolutely critical to slow the revolving door in both directions—both coming out of government and going in.

I should also note that the comprehensive nature of the ethics system we put into place in the Obama administration bears a responsibility for the good results. The first rule, of course, of any ethics system is “tone at the top.” The president exemplifies that. He has the highest standards of ethics himself, and as a result everyone around him feels he will be personally let down if they don’t embrace the ethics system. Good results flow from that. Looking back, we can identify certain aspects that have more and less successful, but it’s important to recognize that the positive results are owed to the gestalt. Our transparency and ethics system was one of the most through and transparent that I’ve seen in any government, and the result speak for themselves.

Editor's note: This post originally appeared in the New England Journal of Medicine's Perspective online series on April 22, 2015.

Congress has finally euthanized the sustainable growth rate formula (SGR). Enacted in 1997 and intended to hold down growth of Medicare spending on physician services, the formula initially worked more or less as intended. Then it began to call for progressively larger and more unrealistic fee cuts — nearly 30% in some years, 21% in 2015. Aware that such cuts would be devastating, Congress repeatedly postponed them, and most observers understood that such cuts would never be implemented. Still, many physicians fretted that the unthinkable might happen.

Now Congress has scrapped the SGR, replacing it with still-embryonic but promising incentives that could catalyze increased efficiency and greater cost control than the old, flawed formula could ever really have done, in a law that includes many other important provisions. How did such a radical change occur?  And why now?

The “how” was logrolling — the trading of votes by legislators in order to pass legislation of interest to each of them. Logrolling has become a dirty word, a much-reviled political practice. But the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA), negotiated by House leaders John Boehner (R-OH) and Nancy Pelosi (D-CA) and their staffs, is a reminder that old-time political horse trading has much to be said for it.

The answer to “why now?” can be found in the technicalities of budget scoring. Under the SGR, Medicare’s physician fees were tied through a complex formula to a target based on caseloads, practice costs, and the gross domestic product. When current spending on physician services exceeded the targets, the formula called for fee cuts to be applied prospectively. Fee cuts that were not implemented were carried forward and added to any future cuts the formula might generate. Because Congress repeatedly deferred cuts, a backlog developed. By 2012, this backlog combined with assumed rapid future growth in Medicare spending caused the Congressional Budget Office (CBO) to estimate the 10-year cost of repealing the SGR at a stunning $316 billion.

For many years, Congress looked the costs of repealing the SGR squarely in the eye — and blinked. The cost of a 1-year delay, as estimated by the CBO, was a tiny fraction of the cost of repeal. So Congress delayed — which is hardly surprising.

But then, something genuinely surprising did happen. The growth of overall health care spending slowed, causing the CBO to slash its estimates of the long-term cost of repealing the SGR. By 2015, the 10-year price of repeal had fallen to $136 billion. Even this number was a figment of budget accounting, since the chance that the fee cuts would ever have been imposed was minuscule. But the smaller number made possible the all-too-rare bipartisan collaboration that produced the legislation that President Barack Obama has just signed.

The core of the law is repeal of the SGR and abandonment of the 21% cut in Medicare physician fees it called for this year. In its place is a new method of paying physicians under Medicare. Some elements are specified in law; some are to be introduced later. The hard-wired elements include annual physician fee updates of 0.5% per year through 2019 and 0% from 2020 through 2025, along with a “merit-based incentive payment system” (MIPS) that will replace current incentive programs that terminate in 2018. The new program will assess performance in four categories: quality of care, resource use, meaningful use of electronic health records, and clinical practice improvement activities. Bonuses and penalties, ranging from +12% to –4% in 2020, and increasing to +27% to –9% for 2022 and later, will be triggered by performance scores in these four areas. The exact content of the MIPS will be specified in rules that the secretary of health and human services is to develop after consultation with physicians and other health care providers.

Higher fees will be available to professionals who work in “alternative payment organizations” that typically will move away from fee-for-service payment, cover multiple services, show that they can limit the growth of spending, and use performance-based methods of compensation. These and other provisions will ramp up pressure on physicians and other providers to move from traditional individual or small-group fee-for-service practices into risk-based multi-specialty settings that are subject to management and oversight more intense than that to which most practitioners are yet accustomed.

Both parties wanted to bury the SGR. But MACRA contains other provisions, unrelated to the SGR, that appeal to discrete segments of each party. Democrats had been seeking a 4-year extension of CHIP, which serves 8 million children and pregnant women. They were running into stiff head winds from conservatives who wanted to scale back the program. MACRA extends CHIP with no cuts but does so for only 2 years.  It also includes a number of other provisions sought by Democrats: a 2-year extension of the Maternal, Infant, and Early Childhood Home Visiting program, plus permanent extensions of the Qualified Individual program, which pays Part B Medicare premiums for people with incomes just over the federal poverty thresholds, and transitional medical assistance, which preserves Medicaid eligibility for up to 1 year after a beneficiary gets a job.

The law also facilitates access to health benefits. MACRA extends for two years states’ authority to enroll applicants for health benefits on the basis of data on income, household size, and other factors gathered when people enroll in other programs such as the Supplemental Nutrition Assistance Program, the National School Lunch Program, Temporary Assistance to Needy Families (“welfare”), or Head Start. It also provides $7.2 billion over the next two years to support community health centers, extending funding established in the Affordable Care Act.

Elements of each party, concerned about budget deficits, wanted provisions to pay for the increased spending. They got some of what they wanted, but not enough to prevent some conservative Republicans in both the Senate and the House from opposing final passage. Many conservatives have long sought to increase the proportion of Medicare Part B costs that are covered by premiums. Most Medicare beneficiaries pay Part B premiums covering 25% of the program’s actuarial value. Relatively high-income beneficiaries pay premiums that cover 35, 50, 65, or 80% of that value, depending on their income. Starting in 2018, MACRA will raise the 50% and 65% premiums to 65% and 80%, respectively, affecting about 2% of Medicare beneficiaries. No single person with an income (in 2015 dollars) below $133,501 or couple with income below $267,001 would be affected initially. MACRA freezes these thresholds through 2019, after which they are indexed for inflation. Under previous law, the thresholds were to have been greatly increased in 2019, reducing the number of high-income Medicare beneficiaries to whom these higher premiums would have applied. (For reference, half of all Medicare beneficiaries currently have incomes below $26,000 a year.)

A second provision bars Medigap plans from covering the Part B deductible, which is now $147. By exposing more people to deductibles, this provision will cause some reduction in Part B spending. Everyone who buys such plans will see reduced premiums; some will face increased out-of-pocket costs. The financial effects either way will be small.

Inflexible adherence to principle contributes to the political gridlock that has plunged rates of public approval of Congress to subfreezing lows. MACRA is a reminder of the virtues of compromise and quiet negotiation. A small group of congressional leaders and their staffs crafted a law that gives something to most members of both parties. Today’s appalling norm of poisonously polarized politics make this instance of political horse trading seem nothing short of miraculous.

The addition of Medicare in 1965 completed a suite of federal programs designed to protect the wealth and health of people reaching older ages in the United States, starting with the Committee on Economic Security of 1934—known today as Social Security. While few would deny Medicare’s important role in improving older and disabled Americans’ financial security and health, many worry about sustaining and strengthening Medicare to finance high-quality, affordable health care for coming generations.

In 1965, average life expectancy for a 65-year-old man and woman was another 13 years and 16 years, respectively. Now, life expectancy for 65-year-olds is 18 years for men and 20 years for women—effectively a four- to five-year increase.

In 2011, the first of 75-million-plus baby boomers became eligible for Medicare. And by 2029, when all of the baby boomers will be 65 or older, the U.S. Census Bureau predicts 20 percent of the U.S. population will be older than 65. Just by virtue of the sheer size of the aging population, Medicare spending growth will accelerate sharply in the coming years.

The Supreme Court today decided that Congress meant what it said when it enacted the Affordable Care Act (ACA). The ACA requires people in all 50 states to carry health insurance and provided tax credits to help them afford it. To have offered such credits only in the dozen states that set up their own exchanges would have been cruel and unsustainable because premiums for many people would have been unaffordable.

But the law said that such credits could be paid in exchanges ‘established by a state,’ which led some to claim that the credits could not be paid to people enrolled by the federally operated exchange. In his opinion, Chief Justice Roberts euphemistically calls that wording ‘inartful.’ Six Supreme Court justices decided that, read in its entirety, the law provides tax credits in every state, whether the state manages the exchange itself or lets the federal government do it for them.

That decision is unsurprising. More surprising is that the Court agreed to hear the case. When it did so, cases on the same issue were making their ways through four federal circuits. In only one of the four circuits was there a standing decision, and it found that tax credits were available everywhere. It is customary for the Supreme Court to wait to take a case until action in lower courts is complete or two circuits have disagreed. In this situation, the justices, eyeing the electoral calendar, may have preferred to hear the case sooner rather than later to avoid confronting it in the middle of a presidential election.

Whatever the Court’s motives for taking the case, their willingness to hear the case caused supporters of the Affordable Care Act enormous unease. Were the more conservative members of the Court poised to accept an interpretation of the law that ACA supporters found ridiculous but that inartful legislative drafting gave the gloss of plausibility? Judicial demeanor at oral argument was not comforting. A 5-4 decision disallowing payment of tax credits seemed ominously plausible.

The Court’s 6-3 decision ended those fears. The existential threat to health reform from litigation is over. But efforts to undo the Affordable Care Act are not at an end. They will continue in the political sphere. And that is where they should be. ACA opponents know that there is little chance for them to roll back the Affordable Care Act in any fundamental way as long as a Democrat is in the White House. To dismantle the law, they must win the presidency in 2016.

But winning the presidency will not be enough. It would be mid 2017 before ACA opponents could draft and enact legislation to curb the Affordable Care Act and months more before it could take effect. To borrow a metaphor from the military, even if those opposed to the ACA win the presidency, they will have to deal with ‘facts on the ground.’

Social Security faces a financial shortfall. If Congress does nothing about it, current projections indicate that benefits will be cut automatically by 21 percent in 2034. Congress could close the gap by raising revenues, lowering benefits, or doing some of both. If benefits seem generous, Congress is likely to lean toward benefit cuts more than revenue increases. If they seem stingy, then the reverse.

Given the split between the two parties on whether to cut benefits or to raise them, evidence on the adequacy of benefits is central to this key policy debate. Those perceptions will help determine whether Social Security continues to provide basic retirement income for workers with comparatively low earnings histories and a foundation of retirement income for most others or it will become just a minimal safety-net backstop against extreme destitution?

Down-in-the-weeds disagreements among analysts often seem too arcane for anyone other than specialists. But sometimes they are too important to ignore. A current debate about the adequacy of Social Security benefits is an example.

The not-so-simple question is this: are Social Security benefits ‘generous’ or ‘stingy’? To answer this question, people long looked to the Office of the Social Security Actuary. For many years that office published estimates of something called the ‘replacement rate’—that is, how high are benefits paid to retirees and the disabled relative what they earned during their working years. A 2014 retiree with median earnings had average lifetime earnings of about $46,000. That worker qualified for a benefit at age 66 of about $19,000, a replacement rate of about 41%. Replacement rates vary with earnings. Dollar benefits rise with earnings, but they rise less than proportionately. As a result, replacement rates of low earners are higher than replacement rates of high earners.

As you might suppose, there are many ways in which to compute such ‘replacement rates. Because of analytical disputes on which method is best, the Social Security trustees in 2014 decided to stop including replacement rate estimates in their annual reports.

In December 2015, the Congressional Budget Office (CBO) offered what it considered a better measure of the generosity of Social Security. It estimated that replacement rates for middle income recipients were about 60%–dramatically higher than the 41% that the Social Security Trustees had estimated.

The gap between the estimates of CBO and those of Social Security is even larger than it seems. To see why, one needs to recognize that to sustain living standards retirees on average need only about 75% to 80% as much income as they did when working. Retirees need less income because they are spared some work-related expenses, such as transportation to and from work. Those are only average of course; some need more, some less.

If one believed the SSA actuaries, Social Security provides median earners barely more than half of what they need to be as well off as they were when working. Benefit cuts from that modest level would threaten the well-being for the majority of retirees who are entirely or mostly dependent on Social Security benefits—and especially for those with large medical expenses uncovered by Medicare.

On the other hand, if one accepted CBO’s estimates, Social Security provids more than three-quarters of the retirement income target. Against that baseline, benefit cuts would still sting, but they would pose less of a threat, and not much of a threat at all for most retirees who have some income from private pensions or personal savings.

When the CBO estimates came out, conservative commentators welcomed the findings and cited CBO’s well-established and well-earned reputation for objectivity. They correctly noted that many retirees have additional income from private pensions, 401ks, or other personal savings, and asserted that there was no general retirement income shortage. By inference, cutting benefits a bit to help close the long-term funding gap would be no big deal. Social Security advocates were put on the defensive, hard-pressed to challenge the estimates of the widely-respected Congressional Budget Office.

But earlier this year, CBO acknowledged that it had made mistakes in its Decameter estimates and revised them. The new CBO estimate put the replacement rate for middle-level earners at around 42%, almost the same as the estimate of the Social Security actuaries, not the much higher level that had sent ripples through the policy community. One conservative analyst, Andrew Biggs, who had trumpeted the initial CBO finding in The Wall Street Journal, promptly and honorably retracted his article.

Two aspects of this green-eyeshade kerfuffle stand out. The first is that policy debates often depend on obscure technical analyses that are, in turn, remarkably sensitive to ‘black-box’ methods to which few or no outsiders have ready access. The second is that CBO burnished its reputation for honesty by owning up to its own mistakes — in this case, a whopping overestimate of a key number. Such candor is all too rare; it merits notice and praise.

But there is a broader lesson as well. Technical issues of comparable complexity surround numerous current political disputes. Is Bernie Sanders’ single-payer plan affordable? Will Marco Rubio’s tax plan cause deficits to balloon? To vote rationally, people must struggle to see through the rhetorical chaff that surrounds candidates’ favorite claims. There is, alas, no substitute for paying close attention to the data, even if they are ‘down in the weeds.’

Editor's note: This piece originally appeared in Fortune.

Recently, Brookings has posted two articles commenting on proposals to raise the full retirement age for Social Security retirement benefits from 67 to 70. One revealed a fundamental misunderstanding of how the program actually works and what the effects of the policy change would be. The other proposes changes to the system that would subvert the fundamental purpose of the Social Security in the name of ‘reforming’ it.

A number of Republican presidential candidates and others have proposed raising the full retirement age. In a recent blog, Robert Shapiro, a Democrat, opposed this move, a position I applaud. But he did so based on alleged effects the proposal would in fact not have, and misunderstanding about how the program actually works. In another blog, Stuart Butler, a conservative, noted correctly that increasing the full benefit age would ‘bolster the system’s finances,’ but misunderstood this proposal’s effects. He proposed instead to end Social Security as a universal pension based on past earnings and to replace it with income-related welfare for the elderly and disabled (which he calls insurance).

Let’s start with the misunderstandings common to both authors and to many others. Each writes as if raising the ‘full retirement age’ from 67 to 70 would fall more heavily on those with comparatively low incomes and short life expectancies. In fact, raising the ‘full retirement age’ would cut Social Security Old-Age Insurance benefits by the same proportion for rich and poor alike, and for people whose life expectancies are long or short. To see why, one needs to understand how Social Security works and what ‘raising the full retirement age’ means.

People may claim Social Security retirement benefits starting at age 62. If they wait, they get larger benefits—about 6-8 percent more for each year they delay claiming up to age 70. Those who don’t claim their benefits until age 70 qualify for benefits -- 77 percent higher than those with the same earnings history who claim at age 62. The increments approximately compensate the average person for waiting, so that the lifetime value of benefits is independent of the age at which they claim. Mechanically, the computation pivots on the benefit payable at the ‘full retirement age,’ now age 66, but set to increase to age 67 under current law. Raising the full retirement age still more, from 67 to 70, would mean that people age 70 would get the same benefit payable under current law at age 67. That is a benefit cut of 24 percent. Because the annual percentage adjustment for waiting to claim would be unchanged, people who claim benefits at any age, down to age 62, would also receive benefits reduced by 24 percent.

In plain English, ‘raising the full benefit age from 67 to 70' is simply a 24 percent across-the-board cut in benefits for all new claimants, whatever their incomes and whatever their life-expectancies.

Thus, Robert Shapiro mistakenly writes that boosting the full-benefit age would ‘effectively nullify Social Security for millions of Americans’ with comparatively low life expectancies. It wouldn’t. Anyone who wanted to claim benefits at age 62 still could. Their benefits would be reduced. But so would benefits of people who retire at older ages.

Equally mistaken is Stuart Butler’s comment that increasing the full-benefit age from 67 to 70 would ‘cut total lifetime retirement benefits proportionately more for those on the bottom rungs of the income ladder.’ It wouldn’t. The cut would be proportionately the same for everyone, regardless of past earnings or life expectancy.

Both Shapiro and Butler, along with many others including my other colleagues Barry Bosworth and Gary Burtless, have noted correctly that life expectancies of high earners have risen considerably, while those of low earners have risen little or not at all. As a result, the lifetime value of Social Security Old-Age Insurance benefits has grown more for high- than for low-earners. That development has been at least partly offset by trends in Social Security Disability Insurance, which goes disproportionately to those with comparatively low earnings and life expectancies and which has been growing far faster than Old-Age Insurance, the largest component of Social Security.

But even if the lifetime value of all Social Security benefits has risen faster for high earners than for low earners, an across the board cut in benefits does nothing to offset that trend. In the name of lowering overall Social Security spending, it would cut benefits by the same proportion for those whose life expectancies have risen not at all because the life expectancy of others has risen. Such ‘evenhandeness’ calls to mind Anatole France’s comment that French law ‘in its majestic equality, ...forbids rich and poor alike to sleep under bridges, beg in streets, or steal loaves of bread.’

Faulty analyses, such as those of Shapiro and Butler, cannot conceal a genuine challenge to policy makers. Social Security does face a projected, long-term funding shortfall. Trends in life expectancies may well have made the system less progressive overall than it was in the past. What should be done?

For starters, one needs to recognize that for those in successive age cohorts who retire at any given age, rising life expectancy does not lower, but rather increases their need for Social Security retirement benefits because whatever personal savings they may have accumulated gets stretched more thinly to cover more retirement years.

For those who remain healthy, the best response to rising longevity may be to retire later. Later retirement means more time to save and fewer years to depend on savings. Here is where the wrong-headedness of Butler’s proposal, to phase down benefits for those with current incomes of $25,000 or more and eliminate them for those with incomes over $100,000, becomes apparent. The only source of income for full retirees is personal savings and, to an ever diminishing degree, employer-financed pensions. Converting Social Security from a program whose benefits are based on past earnings to one that is based on current income from savings would impose a tax-like penalty on such savings, just as would a direct tax on those savings. Conservatives and liberals alike should understand that taxing something is not the way to encourage it.

Still, working longer by definition lowers retirement income needs. That is why some analysts have proposed raising the age at which retirement benefits may first be claimed from age 62 to some later age. But this proposal, like across-the-board benefit cuts, falls alike on those who can work longer without undue hardship and on those in physically demanding jobs they can no longer perform, those whose abilities are reduced, and those who have low life expectancies. This group includes not only blue-collar workers, but also many white-collar employees, as indicated by a recent study of the Boston College Retirement Center. If entitlement to Social Security retirement benefits is delayed, it is incumbent on policymakers to link that change to other ‘backstop’ policies that protect those for whom continued work poses a serious burden. It is also incumbent on private employers to design ways to make workplaces friendlier to an aging workforce.

The challenge of adjusting Social Security in the face of unevenly distributed increases in longevity, growing income inequality, and the prospective shortfall in Social Security financing is real. The issues are difficult. But solutions are unlikely to emerge from confusion about the way Social Security operates and the actual effects of proposed changes to the program. And it will not be advanced by proposals that would bring to Social Security the failed Vietnam War strategy of destroying a village in order to save it.

If you’re reading this article, chances are you know people who are still getting married. But it’s getting rarer, especially among the youngest generation and those who are less educated. We used to assume people would marry before having children. But marriage is no longer the norm. Half of all children born to women under 30 are born out of wedlock. The proportion is even higher among those without a college degree.

What’s going on here? Most of today’s young adults don’t feel ready to marry in their early 20s. Many have not completed their educations; others are trying to get established in a career; and many grew up with parents who divorced and are reluctant to make a commitment or take the risks associated with a legally binding tie.

But these young people are still involved in romantic relationships. And yes, they are having sex. Any stigma associated with premarital sex disappeared a long time ago, and with sex freely available, there’s even less reason to bother with tying the knot. The result: a lot of drifting into unplanned pregnancies and births to unmarried women and their partners with the biggest problems now concentrated among those in their 20s rather than in their teens. (The teen birth rate has actually declined since the early 1990s.)

Does all of this matter? In a word, yes.

These trends are not good for the young people involved and they are especially problematic for the many children being born outside marriage. The parents may be living together at the time of the child’s birth but these cohabiting relationships are highly unstable. Most will have split before the child is age 5.

Social scientists who have studied the resulting growth of single-parent families have shown that the children in these families don’t fare as well as children raised in two-parent families. They are four or five times as likely to be poor; they do less well in school; and they are more likely to engage in risky behaviors as adolescents. Taxpayers end up footing the bill for the social assistance that many of these families need.

Is there any way to restore marriage to its formerly privileged position as the best way to raise children? No one knows. The fact that well-educated young adults are still marrying is a positive sign and a reason for hope. On the other hand, the decline in marriage and rise in single parenthood has been dramatic and the economic and cultural transformations behind these trends may be difficult to reverse.

Women are no longer economically dependent on men, jobs have dried up for working-class men, and unwed parenthood is no longer especially stigmatized. The proportion of children raised in single-parent homes has, as a consequence, risen from 5 percent in 1960 to about 30 percent now.

Conservatives have called for the restoration of marriage as the best way to reduce poverty and other social ills. However, they have not figured out how to do this.

The George W. Bush administration funded a series of marriage education programs that failed to move the needle in any significant way. The Clinton administration reformed welfare to require work and thus reduced any incentive welfare might have had in encouraging unwed childbearing. The retreat from marriage has continued despite these efforts. We are stuck with a problem that has no clear governmental solution, although religious and civic organizations can still play a positive role.

But perhaps the issue isn’t just marriage. What may matter even more than marriage is creating stable and committed relationships between two mature adults who want and are ready to be parents before having children. That means reducing the very large fraction of births to young unmarried adults that occur before these young people say they are ready for parenthood.

Among single women under the age of 30, 73 percent of all pregnancies are, according to the woman herself, either unwanted or badly mistimed. Some of these women will go on to have an abortion but 60 percent of all of the babies born to this group are unplanned.

As I argue in my book, “Generation Unbound,” we need to combine new cultural messages about the importance of committed relationships and purposeful childbearing with new ways of helping young adults avoid accidental pregnancies. The good news here is that new forms of long-acting but fully reversible contraception, such as the IUD and the implant, when made available to young women at no cost and with good counseling on their effectiveness and safety, have led to dramatic declines in unplanned pregnancies. Initiatives in the states of Colorado and Iowa, and in St. Louis have shown what can be accomplished on this front.

Would greater access to the most effective forms of birth control move the needle on marriage? Quite possibly. Unencumbered with children from prior relationships and with greater education and earning ability, young women and men would be in a better position to marry. And even if they fail to marry, they will be better parents.

My conclusion: marriage is in trouble and, however desirable, will be difficult to restore. But we can at least ensure that casual relationships outside of marriage don’t produce children before their biological parents are ready to take on one of the most difficult social tasks any of us ever undertakes: raising a child. Accidents happen; a child shouldn’t be one of them.

The issue of paid leave is heating up in 2016. At least two presidential candidates — Democrat Hillary Clinton and Republican Sen. Marco Rubio (Fla.) — have proposed new federal policies. Several states and large cities have begun providing paid leave to workers when they are ill or have to care for a newborn child or other family member.

This forward movement on paid-leave policy makes sense. The United States is the only advanced country without a paid-leave policy. While some private and public employers already provide paid leave to their workers, the workers least likely to get paid leave are low-wage and low-income workers who need it most. They also cannot afford to take unpaid leave, which the federal government mandates for larger companies.

Paid leave is good for the health and development of children; it supports work, enabling employees to remain attached to the labor force when they must take leave; and it can lower costly worker turnover for employers. Given the economic and social benefits it provides and given that the private market will not generate as much as needed, public policies should ensure that such leave is available to all.

But it is important to do so efficiently, so as not to burden employers with high costs that could lead them to substantially lower wages or create fewer jobs.

States and cities that require employers to provide paid sick days mandate just a small number, usually three to seven days. Family or temporary disability leaves that must be longer are usually financed through small increases in payroll taxes paid by workers and employers, rather than by employer mandates or general revenue.

Policy choices could limit costs while expanding benefits. For instance, states should limit eligibility to workers with experience, such as a year, and it might make sense to increase the benefit with years of accrued service to encourage labor force attachment. Some states provide four to six weeks of family leave, though somewhat larger amounts of time may be warranted, especially for the care of newborns, where three months seems reasonable.

Paid leave need not mean full replacement of existing wages. Replacing two-thirds of weekly earnings up to a set limit is reasonable. The caps and partial wage replacement give workers some incentive to limit their use of paid leave without imposing large financial burdens on those who need it most.

While many states and localities have made sensible choices in these areas, some have not. For instance, the D.C. Council has proposed paid-leave legislation for all but federal workers that violates virtually all of these rules. It would require up to 16 weeks of temporary disability leave and up to 16 weeks of paid family leave; almost all workers would be eligible for coverage, without major experience requirements; and the proposed law would require 100 percent replacement of wages up to $1,000 per week, and 50 percent coverage up to $3,000. It would be financed through a progressive payroll tax on employers only, which would increase to 1 percent for higher-paid employees.

Our analysis suggests that this level of leave would be badly underfunded by the proposed tax, perhaps by as much as two-thirds. Economists believe that payroll taxes on employers are mostly paid through lower worker wages, so the higher taxes needed to fully fund such generous leave would burden workers. The costly policy might cause employers to discriminate against women.

The disruptions and burdens of such lengthy leaves could cause employers to hire fewer workers or shift operations elsewhere over time. This is particularly true here, considering that the D.C. Council already has imposed costly burdens on employers, such as high minimum wages (rising to $11.50 per hour this year), paid sick leave (although smaller amounts than now proposed) and restrictions on screening candidates. The minimum wage in Arlington is $7.25 with no other mandates. Employers will be tempted to move operations across the river or to replace workers with technology wherever possible.

Cities, states and the federal government should provide paid sick and family leave for all workers. But it can and should be done in a fiscally responsible manner that does not place undue burdens on the workers themselves or on their employers.

Editor's note: this piece originally appeared in The Washington Post. 

The injustices faced by African Americans are high on the nation’s agenda. “Black Lives Matter” has become a rallying cry that has elicited intense feelings among both supporters and detractors. As William Julius Wilson has pointed out on this blog, the focus on policing and criminal justice is necessary but not sufficient. Concerted action is required to tackle systematic racial gaps in everything from income and wealth to employment rates, poverty rates, and educational achievement.

Ta-Nehisi Coates argues that financial reparations should be paid to all those who have suffered directly or indirectly from slavery and its aftermath, including present day injustices such as the targeting of subprime mortgages to minorities. The moral case is compelling, and Coates notes that there have been other instances in U.S. history when reparations have been paid—such as to some Native American tribes and to the Japanese-Americans thrown into internment camps during World War II.

Even if the moral argument for reparations is won, there are formidable obstacles in terms of policy, politics, and law. How would reparations work in practice? To be fair, Coates does support the bill from Congressman John Conyers establishing a commission to examine precisely these questions. Even if a workable policy can be found, the political opposition would, to put it mildly, be formidable. There are also doubts about constitutional legality. However, these are certainly questions worthy of better answers than the ones currently being made.

Reparations are a stark example of a race-based policy: targeting resources or an intervention at an explicitly-defined racial group. At the other extreme are “race-blind” policies, applied with no regard to race (at least in theory). But there is a middle ground, consisting of what might be labeled ‘race-conscious’ policies. These policies would be designed to close racial gaps without targeting racial groups.

What might race-conscious policies look like? Here are some ideas:

1. Professors William Darity at Duke and Darrick Hamilton of The New School propose to tackle race gaps in wealth by providing “baby bonds” to children born to families with limited wealth. In 2013, median net worth was $11,000 for black households compared to $141,900 for whites. Darity and Hamilton are supporters of reparations in principle, but are alert to policy and political feasibility. Their specific proposal is that every baby born into a family with below-median wealth receives a “baby bond” or trust fund. These would be worth $50,000 to $60,000 on average, but scaled according to the level of the family’s wealth. The money would be available at the age of 18 for certain expenditures such as paying for college or buying a home. This is a good example of a race-conscious policy. It is not explicitly targeted on race but it would have its greatest impact on African American families.
2. While racial wealth gaps are large and troubling, the disappearance of almost half of unskilled, young black men from the labor force may be an even greater problem in the long run. A comprehensive approach on jobs could include raising the minimum wage, expanding the EITC, and providing subsidized jobs in either the public or private sector for those unable to find jobs on their own. The job subsidies might be targeted on young adults from high-poverty neighborhoods where joblessness is endemic. The subsidized jobs would help people of all races, but especially African Americans. A jobs-based program is also likely to find greater political support than straightforward wealth redistribution. Granted, such jobs programs are hard to administer, but we now have a large number of workers whose job prospects are slim to nonexistent in a technologically-oriented and service-based economy.
3. An enhanced EITC could also help to increase wealth (or lower indebtedness). As Kathryn Edin and her colleagues note in It’s Not Like I’m Poor, the EITC is normally received as a lump sum refund at the end of the year. As a form of forced saving, it enables poor families to repay debt and make mobility enhancing investments in themselves or their children. According to Edin, recipients like the fact that, unlike welfare, the tax credit links them socially and psychologically to other Americans who receive tax refunds. A more generous EITC could therefore help on the wealth as well as income side, and narrow racial gaps in both.
4. A final example of a race-conscious policy is the Texas “top 10” law, which guarantees admission to any public university in the state for students in the top 10 percent of their high school class. This plan could be expanded to other states.

The “Black Lives Matter” movement has refocused the nation’s attention on mass incarceration and related injustices in the criminal justice system. But this problem exists side by side with racial inequalities in income, wealth, education, and employment. There are no easy answers to America’s stubborn race gaps. But jobs and wages seem to us to be of paramount importance. Implemented in a race-conscious way (by targeting them to areas suffering from high rates of poverty and joblessness), employment policy might be the most powerful instrument of all for race equality.

Far too many people reach their advanced years without planning for how they want their lives to end. The result too often is needless suffering, reduced dignity and autonomy, and agonizing decisions for family members.

Addressing these end-of-life issues is difficult. Most of us don’t want to confront them for ourselves or our family members. And until recently, many people resisted the idea of reimbursing doctors for end-of-life counselling sessions. In 2009, Sarah Palin labelled such sessions as the first step in establishing “death panels.” Although no such thing was contemplated when Representative Earl Blumenauer (D- Oregon) proposed such reimbursement, the majority of the public believed that death panels and euthanasia were just around the corner. Even the Obama Administration subsequently backed away from efforts to allow such reimbursement.

Fortunately, this is now history. In the past year or two the tenor of the debate has shifted toward greater acceptance of the need to deal openly with these issues. At least three developments illustrate the shift.

First, talk of “death panels” has receded, and new regulations, approved in late 2015 to take effect in January of this year, now allow Medicare reimbursement for end of life counselling. The comment period leading up to this decision was, according to most accounts, relatively free of the divisive rhetoric characterizing earlier debates. Both the American Medical Association and the American Hospital Association have signaled their support.

Second, physicians are increasingly recognizing that the objective of extending life must be balanced against the expressed priorities of their patients which often include the quality and not just the length of remaining life. Atal Gwande’s best-selling book, Being Mortal, beautifully illustrates the challenges for both doctors and patients. With well-grounded and persuasive logic, Gwande speaks of the need to de-medicalize death and dying.

The third development is perhaps the most surprising. It is a bold proposal advanced by Governor Jeb Bush before he bowed out of the Presidential race, suggesting that eligibility for Medicare be conditioned on having an advanced directive. His interest in these issues goes back to the time when as governor of Florida he became embroiled in a dispute about the removal of a feeding tube from a comatose Terry Schiavo. Ms. Schiavo’s husband and parents were at odds about what to do, her husband favoring removal and her parents wishing to sustain life. In the end, although the Governor sided with the parents, the courts decided in favor of the husband and allowed her to die. If an advanced directive had existed, the family disagreement along with a long and contentious court battle could have been avoided.

The point of such directives is not to pressure people into choosing one option over another but simply to insure that they consider their own preferences while they are still able. Making this a requirement for receipt of Medicare would almost surely encourage more people to think seriously about the type of care they would like toward the end of life and to talk with both their doctors and their family about these views. However, for many others, it would be a step too far and might reverse the new openness to advanced planning. A softer version nudging Medicare applicants to address these issues might be more acceptable. They would be asked to review several advance directive protocols, to choose one (or substitute their own). If they felt strongly that such planning was inappropriate, they could opt out of the process entirely and still receive their benefits.

Advanced care planning should not be linked only to Medicare. We should encourage people to make these decisions earlier in their lives and provide opportunities for them to revisit their initial decisions. This could be accomplished by implementing a similar nudge-like process for Medicaid recipients and those covered by private insurance.

Right now too few people are well informed about their end-of-life options, have talked to their doctors or their family members, or have created the necessary documents. Only about half of all of those who have reached the age of 60 have an advanced directive such as a living will or a power of attorney specifying their wishes. Individual preferences will naturally vary. Some will want every possible treatment to forestall death even if it comes with some suffering and only a small hope of recovery; others will want to avoid this by being allowed to die sooner or in greater comfort. Research suggests that when given a choice, most people will choose comfort care over extended life.

In the absence of advance planning, the choice of how one dies is often left to doctors, hospitals, and relatives whose wishes may or may not represent the preferences of the individual in their care. For example, most people would prefer to die at home but the majority do not. Physicians are committed to saving lives and relatives often feel guilty about letting a loved one “go.”

The costs of prolonging life when there is little point in doing so can be high. The average Medicare patient in their last year of life costs the government $33,000 with spending in that final year accounting for 25 percent of all Medicare spending. Granted no one knows in advance which year is “their last” so these data exaggerate the savings that better advance planning might yield, but even if it is 10% that represents over $50 billion a year. Dr. Ezekiel Emanuel, an expert in this area, notes that hospice care can reduce costs by 10 to 20 percent for cancer patients but warns that little or no savings have accompanied palliative care for heart failure or emphysema patients, for example. This could reflect the late use of palliative care in such cases or the fact that palliative care is more expensive than assumed.

In the end, Dr. Emanuel concludes, and I heartily agree, that a call for better advance planning should not be based primarily on its potential cost savings but rather on the respect it affords the individual to die in dignity and in accordance with their own preferences.

Editor's note: This piece originally appeared in Inside Sources.

Senior Fellows Ron Haskins and Isabel Sawhill are the first joint recipients of the Daniel Patrick Moynihan Prize from the American Academy of Political and Social Science (AAPSS). The prize is awarded each year to a leading policymaker, social scientist, or public intellectual whose career focuses on advancing the public good through social science. It was named after the late senator from New York and renowned sociologist Daniel Patrick Moynihan. The pair accepted the award May 12 at a ceremony in Washington, DC. 

In their joint lecture delivered at the ceremony, Haskins and Sawhill emphasized the importance of evidence-based public policy, highlighting Sawhill’s latest work in her book, Generation Unbound (Brookings, 2014). Watch their entire speech here:

“Marriage is disappearing and more and more babies are born outside marriage,” Sawhill said during the lecture. “Right now, the proportion born outside of marriage is about 40 percent. It’s higher than that among African Americans and lower than that among the well-educated. But it’s no longer an issue that just affects the poor or minority groups.”

Download Sawhill's slides » | Download Ron Haskins' slides »

The power of evidence-based policy is finally being recognized, Haskins added. “One of the prime motivating factors of the current evidence-based movement,” he said, “is the understanding, now widespread, that most social programs either have not been well evaluated or they don’t work.” Haskins continued:

Perhaps the most important social function of social science is to find and test programs that will reduce the nation’s social problems. The exploding movement of evidence-based policy and the many roots the movement is now planting, offer the best chance of fulfilling this vital mission of social science, of achieving, in other words, exactly the outcomes Moynihan had hoped for.

He pointed toward the executive branch, state governments, and non-profits implementing policies that could make substantial progress against the nation’s social problems.

Richard Reeves, a senior fellow at Brookings and co-director, with Haskins, of the Center on Children and Families (CCF), acknowledged Haskins and Sawhill’s “powerful and unique intellectual partnership” and their world-class work on families, poverty, opportunity, evidence, parenting, work, and education.

Haskins and Sawhill were the first to be awarded jointly by the AAPSS, which recognizes their 15-year collaboration at Brookings and the Center on Children and Families, which they established. In addition to their work at CCF, the two co-wrote Creating an Opportunity Society (Brookings 2009) and serve as co-editors of The Future of Children, a policy journal that tackles issues that have an impact on children and families.

Haskins and Sawhill join the ranks of both current and past Brookings scholars who have received the Moynihan Prize, including Alice Rivlin (recipient of the inaugural prize), Rebecca Blank, and William Julius Wilson along with other distinguished scholars and public servants.

Want to learn more about the award’s namesake? Read Governance Studies Senior Fellow and historian Steve Hess’s account of Daniel Patrick Moynihan’s time in the Nixon White House in his book The Professor and the President (Brookings, 2014).

When Franklin Roosevelt delivered his second inaugural address on January 20, 1936 he lamented the “one-third of a nation ill-housed, ill-clad, ill-nourished.” He challenged Americans to measure their collective progress not by “whether we add more to the abundance of those who have much; [but rather] whether we provide enough for those who have too little.” In our new paper, One third of a nation: Strategies for helping working families, we ask a simple question: How are we doing?

In brief, we find that:

• The gulf in labor market income between the haves and have-nots remains wide. The median income of households in the bottom third in 2014 was $24,000, just a little more than a quarter of the median of $90,000 for the top two-thirds.
• The bottom-third households are disproportionately made up of minority adults, adults with limited educational attainment, and single parents.  
• The most important reason for the low incomes of the bottom third is a “work gap”: the fact that many are not employed at all, or work limited hours. 

The work gap

The decline in labor force participation rates has been widely documented, but the growing gulf in the work gap between the bottom third and the rest of the population is truly striking:

While the share of men who are employed in the top two-thirds has been quite stable since 1980, lower-income men’s work rates have declined by 11 percentage points. What about women?

Middle- and upper-income women have increased their work rates by 13 percentage points. This has helped maintain or even increase their family’s income. But employment rates among lower-income women have been flat, despite reforms of the welfare system and safety net designed to encourage work.

Many on the left point to problems like low pay and lack of access to affordable childcare, and so favor a higher minimum wage and more subsidies for daycare. For many conservatives, the problem is rooted in family breakdown and a dependency-inducing safety net. They therefore champion proposals like marriage promotion programs and strict work requirements for public benefits. Most agree about the importance of education.

Time to debate some more radical solutions 

It may be that the standard solutions to the problems of the bottom third, while helpful, are no longer sufficient. A debate about whether to make safety net programs such as Food Stamps and housing assistance conditional on work or training is underway. So are other solutions such as subsidized jobs (created by some states during the Great Recession as a natural complement to a work-conditioned safety net), more work sharing (used in Germany during the recession), or even a universal basic income (being considered by Swiss voters in June).

As a rhetorical ideal, greater opportunity is hard to beat. Just about all candidates for high elected office declare their commitments to promoting opportunity – who, after all, could be against it? But opportunity is, to borrow a term from the philosopher and political theorist Isaiah Berlin, a "protean" word, with different meanings for different people at different times.

Typically, opportunity is closely entwined with an idea of upward mobility, especially between generations. The American Dream is couched in terms of a daughter or son of bartenders or farm workers becoming a lawyer, or perhaps even a U.S. senator. But even here, there are competing definitions of upward mobility.

It might mean being better off than your parents were at a similar age. This is what researchers call "absolute mobility," and largely relies on economic growth – the proverbial rising tide that raises most boats.

Or it could mean moving to a higher rung of the ladder within society, and so ending up in a better relative position than one's parents.

Scholars label this movement "relative mobility." And while there are many ways to think about status or standard of living – education, wealth, health, occupation – the most common yardstick is household income at or near middle age (which, somewhat depressingly, tends to be defined as 40).

As a basic principle, we ought to care about both kinds of mobility as proxies for opportunity. We want children to have the chance to do absolutely and relatively well in comparison to their parents.

On the One Hand…

So how are we doing? The good news is that economic standards of living have improved over time. Most children are therefore better off than their parents. Among children born in the 1970s and 1980s, 84 percent had higher incomes (even after adjusting for inflation) than their parents did at a similar age, according to a Pew study. Absolute upward income mobility, then, has been strong, and has helped children from every income class, especially those nearer the bottom of the ladder. More than 9 in 10 of those born into families in the bottom fifth of the income distribution have been upwardly mobile in this absolute sense.

There's a catch, though. Strong absolute mobility goes hand in hand with strong economic growth. So it is quite likely that these rates of generational progress will slow, since the potential growth rate of the economy has probably diminished. This risk is heightened by an increasingly unequal division of the proceeds of growth in recent years. Today's parents are certainly worried. Surveys show that they are far less certain than earlier cohorts that their children will be better off than they are.

If the story on absolute mobility may be about to turn for the worse, the picture for relative mobility is already pretty bad. The basic message here: pick your parents carefully. If you are born to parents in the poorest fifth of the income distribution, your chance of remaining stuck in that income group is around 35 to 40 percent. If you manage to be born into a higher-income family, the chances are similarly good that you will remain there in adulthood.

It would be wrong, however, to say that class positions are fixed. There is still a fair amount of fluidity or social mobility in America – just not as much as most people seem to believe or want. Relative mobility is especially sticky in the tails at the high and low end of the distribution. Mobility is also considerably lower for blacks than for whites, with blacks much less likely to escape from the bottom rungs of the ladder. Equally ominously, they are much more likely to fall down from the middle quintile.

Relative mobility rates in the United States are lower than the rhetoric about equal opportunity might suggest and lower than people believe. But are they getting worse? Current evidence suggests not. In fact, the trend line for relative mobility has been quite flat for the past few decades, according to work by Raj Chetty of Stanford and his co-researchers. It is simply not the case that the amount of intergenerational relative mobility has declined over time.

Whether this will remain the case as the generations of children exposed to growing income inequality mature is not yet clear, though. As one of us (Sawhill) has noted, when the rungs on the ladder of opportunity grow further apart, it becomes more difficult to climb the ladder. To the same point, in his latest book, Our Kids – The American Dream in Crisis, Robert Putnam of Harvard argues that the growing gaps not just in income but also in neighborhood conditions, family structure, parenting styles and educational opportunities will almost inevitably lead to less social mobility in the future. Indeed, these multiple disadvantages or advantages are increasingly clustered, making it harder for children growing up in disadvantaged circumstances to achieve the dream of becoming middle class.

The Geography of Opportunity

Another way to assess the amount of mobility in the United States is to compare it to that found in other high-income nations. Mobility rates are highest in Scandinavia and lowest in the United States, Britain and Italy, with Australia, Western Europe and Canada lying somewhere in between, according to analyses by Jo Blanden, of the University of Surrey and Miles Corak of the University of Ottawa. Interestingly, the most recent research suggests that the United States stands out most for its lack of downward mobility from the top. Or, to paraphrase Billie Holiday, God blesses the child that's got his own.

Any differences among countries, while notable, are more than matched by differences within Pioneering work (again by Raj Chetty and his colleagues) shows that some cities have much higher rates of upward mobility than others. From a mobility perspective, it is better to grow up in San Francisco, Seattle or Boston than in Atlanta, Baltimore or Detroit. Families that move to these high-mobility communities when their children are still relatively young enhance the chances that the children will have more education and higher incomes in early adulthood. Greater mobility can be found in places with better schools, fewer single parents, greater social capital, lower income inequality and less residential segregation. However, the extent to which these factors are causes rather than simply correlates of higher or lower mobility is not yet known. Scholarly efforts to establish why it is that some children move up the ladder and others don't are still in their infancy.

Models of Mobility

What is it about their families, their communities and their own characteristics that determine why they do or do not achieve some measure of success later in life?

To help get at this vital question, the Brookings Institution has created a life-cycle model of children's trajectories, using data from the National Longitudinal Survey of Youth on about 5,000 children from birth to age 40. (The resulting Social Genome Model is now a partnership among three institutions: Brookings, the Urban Institute and Child Trends). Our model tracks children's progress through multiple life stages with a corresponding set of success measures at the end of each. For example, children are considered successful at the end of elementary school if they have mastered basic reading and math skills and have acquired the behavioral or non-cognitive competencies that have been shown to predict later success. At the end of adolescence, success is measured by whether the young person has completed high school with a GPA average of 2.5 or better and has not been convicted of a crime or had a baby as a teenager.

These metrics capture common-sense intuition about what drives success. But they are also aligned with the empirical evidence on life trajectories. Educational achievement, for example, has a strong effect on later earnings and income, and this well-known linkage is reflected in the model. We have worked hard to adjust for confounding variables but cannot be sure that all such effects are truly causal. We do know that the model does a good job of predicting or projecting later outcomes.

Three findings from the model stand out. First, it's clear that success is a cumulative process. According to our measures, a child who is ready for school at age 5 is almost twice as likely to be successful at the end of elementary school as one who is not.

This doesn't mean that a life course is set in stone this early, however.

Children who get off track at an early age frequently get back on track at a later age; it's just that their chances are not nearly as good. So this is a powerful argument for intervening early in life. But it is not an argument for giving up on older youth.

Second, the chances of clearing our last hurdle – being middle class by middle age (specifically, having an income of around $68,000 for a family of four by age 40) – vary quite significantly. A little over half of all children born in the 1980s and 1990s achieved this goal. But those who are black or born into low-income families were very much less likely than others to achieve this benchmark.

Third, the effect of a child's circumstances at birth is strong. We use a multidimensional measure here, including not just the family's income but also the mother's education, the marital status of the parents and the birth weight of the child. Together, these factors have substantial effects on a child's subsequent success. Maternal education seems especially important.

The Social Genome Model, then, is a useful tool for looking under the hood at why some children succeed and others don't. But it can also be used to assess the likely impact of a variety of interventions designed to improve upward mobility. For one illustrative simulation, we hand-picked a battery of programs shown to be effective at different life stages – a parenting program, a high-quality early-edcation program, a reading and socio-emotional learning program in elementary school, a comprehensive high school reform model – and assessed the possible impact for low-income children benefiting from each of them, or all of them.

No single program does very much to close the gap between children from lower- and higher-income families. But the combined effects of multiple programs – that is, from intervening early and often in a child's life – has a surprisingly big impact. The gap of almost 20 percentage points in the chances of low-income and high-income children reaching the middle class shrinks to six percentage points. In other words, we are able to close about two-thirds of the initial gap in the life chances of these two groups of children. The black-white gap narrows, too.

Looking at the cumulative impact on adult incomes over a working life (all appropriately discounted with time) and comparing these lifetime income benefits to the costs of the programs, we believe that such investments would pass a cost-benefit test from the perspective of society as a whole and even from the narrower prospective of the taxpayers who fund the programs.

What Now?

Understanding the processes that lie beneath the patterns of social mobility is critical. It is not enough to know how good the odds of escaping are for a child born into poverty. We want to know why. We can never eliminate the effects of family background on an individual's life chances. But the wide variation among countries and among cities in the U.S. suggests that we could do better – and that public policy may have an important role to play. Models like the Social Genome are intended to assist in that endeavor, in part by allowing policymakers to bench- test competing initiatives based on the statistical evidence.

America's presumed exceptionalism is rooted in part on a belief that class-based distinctions are less important than in Western Europe. From this perspective, it is distressing to learn that American children do not have exceptional opportunities to get ahead – and that the consequences of gaps in children's initial circumstances might embed themselves in the social fabric over time, leading to even less social mobility in the future.

But there is also some cause for optimism. Programs that compensate at least to some degree for disadvantages earlier in life really can close opportunity gaps and increase rates of social mobility. Moreover, by most any reasonable reckoning, the return on the public investment is high.

Editor's note: This piece originally appeared in the Milken Institute Review.

Executive Summary

Two-thirds of Americans have broadband Internet access in their homes.[1] But because of poor infrastructure or high prices, the remaining third of Americans do not. In some areas, broadband Internet is plainly unavailable because of inadequate infrastructure: More than 14 million Americans – approximately 5 percent of the total population – live in areas where terrestrial (as opposed to mobile) fixed broadband connectivity is unavailable.[2] The effects of insufficient infrastructure development have contributed to racial and cultural disparities in broadband access; for example, terrestrial broadband is available to only 10 percent of residents on tribal lands.[3]

Even where terrestrial broadband connectivity is available, however, the high price of broadband service can be prohibitive, especially to lower income Americans. While 93 percent of adults earning more than $75,000 per year are wired for broadband at home, the terrestrial broadband adoption rate is only 40 percent among adults earning less than $20,000 annually.[4] These costs also contribute to racial disparities; almost 70 percent of whites have adopted terrestrial broadband at home,   but only 59 percent of blacks and 49 percent of Hispanics have done the same.[5]

America's wireless infrastructure is better developed, but many Americans still lack wireless broadband coverage. According to a recent study, 3G wireless networks cover a good portion of the country, including 98 percent of the United States population,[6] but certain states have dramatically lower coverage rates than others. For example, only 71 percent of West Virginia's population is covered by a 3G network.[7] Wireless providers will likely use existing 3G infrastructure to enable the impending transition to 4G networks.[8] Unless wireless infrastructure expands quickly, those Americans that remain unconnected may be left behind.

Though America is responsible for the invention and development of Internet technology, the United States has fallen behind competing nations on a variety of important indicators, including broadband adoption rate and price. According to the Organization for Economic Cooperation and Development's survey of 31 developed nations, the United States is ranked fourteenth in broadband penetration rate (i.e. the number of subscribers per 100 inhabitants); only 27.1 percent of Americans have adopted wired broadband subscriptions, compared to 37.8 percent of residents of the Netherlands.[9]

America also trails in ensuring the affordability of broadband service. The average price for a medium-speed (2.5Mbps-10Mbps) Internet plan in America is the seventeenth lowest among its competitor nations. For a medium-speed plan, the average American must pay $38 per month, while an average subscriber in Japan (ranked first) pays only $22 for a connection of the same quality.[10]

The National Broadband Plan (NBP), drafted by the Federal Communication Commission and released in 2010, seeks to provide all Americans with affordable broadband Internet access.[11] Doing so will not be cheap; analysts project that developing the infrastructure necessary for full broadband penetration will require $24 billion in subsidies and spending.[12] President Obama’s stimulus package has already set aside $4.9 billion to develop broadband infrastructure,[13] and some small ongoing federal programs receive an annual appropriation to promote broadband penetration.[14] However, these funding streams will only account for one-third of the $24 billion necessary to achieve the FCC's goal of full broadband penetration.[15] Moreover, developing infrastructure alone is not enough; many low-income Americans are unable to afford Internet access, even if it is offered in their locality.

To close this funding gap and to make broadband more accessible, the National Broadband Plan proposes to transform the Universal Service Fund – a subsidy program that spends $8.7 billion every year to develop infrastructure and improve affordability for telephone service – into a program that would do the same for broadband Internet.

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For many years, Africans have complained that the International Criminal Court (ICC) has concentrated its efforts exclusively in Africa, a process that has made a mockery of the court’s claims to bring about an end to global impunity. Some Africans have even argued that the ICC’s claims that it is helping bring about justice in Africa are not unlike those made by proponents of the colonial order established by the Berlin Conference in 1884-1885.

On Tuesday, March 11, I participated in a panel discussion entitled, “The International Criminal Court in Africa: Bias, Legitimate Objections, or Excuses for Impunity?” co-hosted by New York University’s School of Continuing and Professional Studies (SCPS), Center for Global Affairs and the International Center for Transitional Justice (ICTJ).  The program brought together experts interested in justice and peaceful coexistence in Africa to examine the role that the International Criminal Court (ICC) can play in minimizing impunity in the continent.

I was joined by Ambassador Tiina Intelmann, president of the Assembly of States Parties of the International Criminal Court; Richard Dicker, director of the International Justice Program at Human Rights Watch; and Jennifer Trahan, clinical associate professor at the New York University’s School of Continuing and Professional Studies (SCPS), Center for Global Affairs.  David Tolbert, president of the International Center for Transitional Justice, moderated the discussion.

The most important conclusions from what was a robust dialogue were that (i) it is very important that African countries develop the legal and institutional capacity to deal effectively and fully with impunity and other extra-legal activities that impede human development and peaceful coexistence; (ii) the international community should help African countries develop that capacity; (iii) the ICC should make a concerted effort to open dialogue with the African Union in particular and Africans generally in order for the court to gain a better insight into African problems, while, at the same time, help Africans understand and appreciate the nature of the ICC’s work, how it functions, and why it is a critical international body in the fight against impunity; and (iv) the ICC needs to improve openness and transparency in its activities. To make the ICC a truly international court, important countries such as the United States, India, the People’s Republic of China and the Russian Federation need to be brought aboard. Obviously, more dialogue is needed and it is my hope that soon, we will be able to undertake a discussion of this type somewhere in Africa.

During my presentation, I argued that an important part of improving relations between Africa and the ICC is that Africans must take ownership of their problems and find ways to resolve them themselves. For one thing, justice is most effectively delivered locally. Hence, the first line of business is for each African country to develop the legal and institutional capacity to deal with impunity and other governance problems. External actors, notably the ICC, should only be considered conflict-resolution instruments of last resort.

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The Nile River is one of the most important resources in Africa and supports the livelihoods of millions of people. Recently, though, efficient and equitable utilization of the waters of the Nile River has become an increasingly contentious issue, with many of the riparian countries demanding a revision of what they believe is an inappropriate legal regime. Currently, allocation and utilization of the waters of the Nile River is governed by the colonial-era Nile Waters Agreements, which were negotiated and entered into with the help of Great Britain, but without the participation of most of the river’s riparian states. These agreements allocated most of the waters of the Nile River to the downstream riparians—Egypt and Sudan—largely ignoring the development needs of the upstream riparians, like Ethiopia, whose highlands provide most of the water that flows into the Nile River. The upstream riparians contend that they were not party to the Nile Waters Agreements and thus should not be bound by them. As such, they want these agreements set aside and a new, more equitable legal regime. Egypt, however, considers the existing legal regime binding on all the Nile River riparian states and, thus, is opposed to any changes that might interfere with or reduce its “historically acquired rights.” Already the decision by Addis Ababa to proceed with the construction of the Grand Ethiopian Renaissance Dam on the Blue Nile has caused significant deterioration in relations between Cairo and Addis Ababa.

With significant increases in population and pressure to deliver development, especially in the upstream riparian states, the demand for water has become a very important policy imperative in the region. In fact, earlier this year Egypt claimed that, in order to meet its growing water needs by 2050, it will need to add 21 billion cubic meters of water per year to its current water allocation of 55 billion cubic meters. Thus, there is a fear that if this issue is not fully resolved soon, it could morph into a military crisis.

In our new book, Governing the Nile River Basin: The Search for a New Legal Regime, we argue that the current legal regime governing the allocation and utilization of the waters of the Nile River is not tenable, and there is an urgent need for all the Nile River riparian states to enter into a mutually agreed upon legal regime. Issues pertaining to transboundary water resource management, the evolution of current agreements and the role and interests of colonial powers, theories of treaty succession, and the recent attempts by the riparian states to formulate a new legal agreement, are thoroughly examined. We conclude that the most effective way to deal with conflict arising from the allocation and utilization of the Nile River’s waters is for all the downstream and upstream riparians to engage in fresh negotiations to design and adopt a new legal regime. Through a fully consultative process, these countries can provide the Nile River Basin with a legal regime that enhances equitable allocation and utilization. 

Seven months have passed since Israel officially apologized to Turkey for the Mavi Marmara incident of May 2010, in which nine Turks were killed by Israeli fire. What seemed, at the time, to be a diplomatic breakthrough, capable of setting into motion a reconciliation process between America’s two greatest allies in the region, has been frustrated by a series of spiteful interactions.

The Turkish-Israeli alliance of the 1990s and first decade of the 2000s was viewed by senior U.S. officials as an anchor of stability in a changing region. The relationship between Ankara and Jerusalem served vital U.S. interests in the Eastern Mediterranean and the Middle East, and so it was therefore a U.S. priority to restore dialogue between the two former allies-turned-rivals. The Obama administration, throughout both terms, has made a continuous effort to rebuild the relationship and was ultimately successful in setting the stage for the Israeli apology and the Turkish acceptance of that apology. The U.S. was not the only party that stood to gain from reconciliation; both Turkey and Israel have many incentives for normalizing relations. For Turkey, the reestablishment of a dialogue with Israel has four main potential benefits: It would allow for greater involvement in the Israeli-Palestinian peace negotiations, it would provide greater opportunity for information sharing on the developments of the Syrian civil war allowing Turkey to have a more comprehensive perspective, it would also provide more economic opportunities for Turkey especially with regard to cooperation in the field of natural gas (following Israel's High Court of Justice recent ruling that paves the way toward exports of natural gas), and finally it would remove an irritant from Turkey's relations with the United States. In turn, Israel would benefit from the reestablishment of dialogue in three major ways: the rebuilding of relations between senior Turkish and Israeli officials would facilitate intelligence sharing and help to gain a more complete picture of the Syrian crisis, Israel would have the opportunity to contain delegitimization efforts in the Muslim and Arab worlds, and Israel may be able to rejoin NATO related activities and maneuvers.

Despite these enticements, in recent weeks a series of news stories and revelations have put the Turkish-Israeli relationship, yet again, in the international spotlight, raising doubts whether reconciliation between the two countries is at all possible at this time. As the Obama administration struggles to deal with the fallout of allegations that the NSA has tapped the office and cellular phones of Western European leaders and as it focuses on more pressing issues in the Middle East, namely the P5+1 negotiations with Iran, the Syrian crisis, Egypt and negotiations between Israel and the Palestinians, it finds itself with little time to chaperone the Turkish-Israeli reconciliation process. Nevertheless, despite tensions, direct talks are reportedly being held between senior Turkish and Israeli officials in an effort to reach a compensation agreement in the near future.

The Israeli apology and Turkish acceptance, orchestrated by Barack Obama during his trip to the region in March 2013, was an essential first step in a long process of reconciliation, aimed at normalizing relations between the two countries after a four year hiatus in their relationship. The next step was an agreement between the two sides in which Israel was to pay compensation to the families of the victims of the Mavi Marmara. Several rounds of talks between senior Turkish and Israeli representatives were reportedly held during the spring of 2013 in Ankara, Jerusalem and Washington, but to no avail. Disagreements over the amount of compensation to be paid by Israel were reported, but later, in July, Turkish Deputy Prime Minister Arinc clarified that money was not the issue. He stated that the problem lay in Israel’s refusal to acknowledge that the payment was a result of its “wrongful act.” Arinc added that another point of contention was Turkey's demand that Israel cooperate in improving the living conditions of the Palestinians in the Occupied Territories. Arinc emphasized that only when these two conditions were met could the countries move forward to discuss the specific amount of compensation.

The shadow cast over negotiations by Arinc’s comments was darkened by a string of comments made by Turkish Prime Minister Erdogan against Israel. First, he blamed the “interests lobby” – perhaps a reference to the so-called “Israel Lobby” -- for the large protests that took place against him and his government in Istanbul’s Taksim square and across Turkey in June. Then, in August, Erdogan accused Israel of backing the military coup in Egypt, citing comments made in 2011 by the French Jewish philosopher Bernard Henri-Levy, as proof of a long standing Israeli-Jewish plot to deny the Muslim Brotherhood power in Egypt. This drew sharp Israeli criticism, notably from former Israeli Foreign Minister, Avigdor Lieberman, who compared Erdogan to the Nazi Minister of Propaganda, Joseph Goebbels.

Despite these setbacks, bilateral trade between Turkey and Israel has expanded since the official apology and the number of Israeli tourists returning to visit Turkey has risen dramatically. Yet it is clear that with such harsh rhetoric it will be difficult to effectively advance a reconciliation process. Among American, Turkish and Israeli experts, the prevailing view is that Erdogan and the AKP government, mainly due to domestic political considerations, are not interested in normalizing relations with Israel, and that the only reason Erdogan accepted Israeli Prime Minister Netanyahu’s apology was to gain favor with U.S. President Obama.

At the end of August, as the plan for a U.S. military strike in Syria gained momentum, relative calm prevailed in the relations between Ankara and Jerusalem, both focusing on preparations and plans to address the fallout of such an attack. Yet, just when it seemed that tensions were reducing, and Turkish President Gul stated that negotiations "are getting on track," in a September interview with the Washington Post, a series of news stories and revelations injected a poisonous dimension to the already-strained ties.

In early October another round of Turkish-Israeli verbal attacks and counter-attacks was sparked by a Wall Street Journal profile of the Turkish Head of Intelligence, Hakan Fidan, which included a quote from an anonymous Israeli official stating, "It is clear he (Fidan) is not an enemy of Iran." Shortly after came the revelation by David Ignatius in the Washington Post that quoted reliable sources that pointed to Fidan as allegedly passing the names of 10 Iranians working for the Israeli Mossad on to the Iranian intelligence in early 2012. These ten people were later arrested by the Iranian authorities. Senior Turkish officials blamed Israel for leaking the story to Ignatius and the Turkish daily, Hurriyet, reported that Fidan was considering severing ties between Turkish and Israeli intelligence agencies. Reactions in Turkey and Israel to the Ignatius story were harsh and emotional. Turkish officials denied the report while Israeli officials refrained from any public comments. The Friday edition of Yediot's front page headline read, “Turkish Betrayal,” and former Foreign Minister Lieberman voiced his opposition to the apology made in March; he expressed his opinion that it weakened Israel’s stance and image in the region, and he attacked Erdogan for not being interested in a rapprochement.

In recent days Prime Minister Erdogan struck a more conciliatory tone, saying that if Israel is denying involvement in the leak then Turkey must accept it. Israeli media outlets reported over the weekend that Israeli and Turkish negotiators are again trying to reach a compensation agreement. Israeli experts, quoted in these reports, view November 6 as a possible target date to end negotiations over this agreement. The logic behind this being that former Israeli Foreign Minister Lieberman’s verdict is expected that day. If acquitted of corruption charges Mr. Lieberman will return to the Foreign Minister’s job and will likely try and block any attempt to reach an agreement. Turkish experts however assess that Turkey is simply not ready to move forward at this time due to domestic political constraints, as Prime Minister Erdogan and the AKP are bracing for Presidential and local elections in 2014.