This week marks the release of the 2015 Brown Center Report on American Education, the fourteenth issue of the series.  One of the three studies in the report, “Girls, Boys, and Reading,” examines the gender gap in reading.  Girls consistently outscore boys on reading assessments.  They have for a long time.  A 1942 study in Iowa discovered that girls were superior to boys on tests of reading comprehension, vocabulary, and basic language skills.^[i]  Girls have outscored boys on the National Assessment of Educational Progress (NAEP) reading assessments since the first NAEP was administered in 1971. 

I hope you’ll read the full study—and the other studies in the report—but allow me to summarize the main findings of the gender gap study here.

Eight assessments generate valid estimates of U.S. national reading performance: the Main NAEP, given at three grades (fourth, eighth, and 12^th grades); the NAEP Long Term Trend (NAEP-LTT), given at three ages (ages nine, 13, and 17); the Progress in International Reading Literacy Study (PIRLS), an international assessment given at fourth grade; and the Program for International Student Assessment (PISA), an international assessment given to 15-year-olds.  Females outscore males on the most recent administration of all eight tests.  And the gaps are statistically significant.  Expressed in standard deviation units, they range from 0.13 on the NAEP-LTT at age nine to 0.34 on the PISA at age 15.

The gaps are shrinking.  At age nine, the gap on the NAEP-LTT declined from 13 scale score points in 1971 to five points in 2012.  During the same time period, the gap at age 13 shrank from 11 points to eight points, and at age 17, from 12 points to eight points.  Only the decline at age nine is statistically significant, but at ages 13 and 17, declines since the gaps peaked in the 1990s are also statistically significant.  At all three ages, gaps are shrinking because of males making larger gains on NAEP than females.  In 2012, seventeen-year-old females scored the same on the NAEP reading test as they did in 1971.  Otherwise, males and females of all ages registered gains on the NAEP reading test from 1971-2012, with males’ gains outpacing those of females.

The gap is worldwide.  On the 2012 PISA, 15-year-old females outperformed males in all sixty-five participating countries.  Surprisingly, Finland, a nation known for both equity and excellence because of its performance on PISA, evidenced the widest gap.  Girls scored 556 and boys scored 494, producing an astonishing gap of 62 points (about 0.66 standard deviations—or more than one and a half years of schooling).   Finland also had one of the world’s largest gender gaps on the 2000 PISA, and since then it has widened.  Both girls’ and boys’ reading scores declined, but boys’ declined more (26 points vs. 16 points).  To put the 2012 scores in perspective, consider that the OECD average on the reading test is 496.  Finland’s strong showing on PISA is completely dependent on the superior performance of its young women.

The gap seems to disappear by adulthood.  Tests of adult reading ability show no U.S. gender gap in reading by 25 years of age.  Scores even tilt toward men in later years. 

The words “seems to disappear” are used on purpose.  One must be careful with cross-sectional data not to assume that differences across age groups indicate an age-based trend.  A recent Gallup poll, for example, asked several different age groups how optimistic they were about finding jobs as adults.  Optimism fell from 68% in grade five to 48% in grade 12.  The authors concluded that “optimism about future job pursuits declines over time.”  The data do not support that conclusion.  The data were collected at a single point in time and cannot speak to what optimism may have been before or after that point.  Perhaps today’s 12^th graders were even more pessimistic several years ago when they were in fifth grade.  Perhaps the 12^th-graders are old enough to remember when unemployment spiked during the Great Recession and the fifth-graders are not.   Perhaps 12^th-graders are simply savvier about job prospects and the pitfalls of seeking employment, topics on which fifth-graders are basically clueless.

At least with the data cited above we can track measures of the same cohorts’ gender gap in reading over time.  By analyzing multiple cross-sections—data collected at several different points in time—we can look at real change.  Those cohorts of nine-year-olds in the 1970s, 1980s, and 1990s, are—respectively—today in their 50s, 40s, and 30s.  Girls were better readers than boys when these cohorts were children, but as grown ups, women are not appreciably better readers than men.

Care must be taken nevertheless in drawing firm conclusions.  There exists what are known as cohort effects that can bias measurements.  I mentioned the Great Recession.   Experiencing great historical cataclysms, especially war or economic chaos, may bias a particular cohort’s responses to survey questions or even its performance on tests.  American generations who experienced the Great Depression, World War II, and the Vietnam War—and more recently, the digital revolution, the Great Recession, and the Iraq War—lived through events that uniquely shape their outlook on many aspects of life. 

The gender gap is large, worldwide, and persistent through the K-12 years. What should be done about it?  Maybe nothing.  As just noted, the gap seems to dissipate by adulthood.  Moreover, crafting an effective remedy for the gender gap is made more difficult because we don’t definitely know its cause. Enjoyment of reading is a good example.  Many commentators argue that schools should make a concerted effort to get boys to enjoy reading more.  Enjoyment of reading is statistically correlated with reading performance, and the hope is that making reading more enjoyable would get boys to read more, thereby raising reading skills.

It makes sense, but I’m skeptical.  The fact that better readers enjoy reading more than poor readers—and that the relationship stands up even after boatloads of covariates are poured into a regression equation—is unpersuasive evidence of causality.  As I stated earlier, PISA produces data collected at a single point in time.  It isn’t designed to test causal theories.  Reverse causality is a profound problem.  Getting kids to enjoy reading more may in fact boost reading ability.  But the causal relationship might be flowing in the opposite direction, with enhanced skill leading to enjoyment.   The correlation could simply be indicating that people enjoy activities that they’re good at—a relationship that probably exists in sports, music, and many human endeavors, including reading.

A key question for policymakers is whether boosting boys’ enjoyment of reading would help make boys better readers.  I investigate by analyzing national changes in PISA reading scores from 2000, when the test was first given, to 2102.  PISA creates an Index of Reading Enjoyment based on several responses to a student questionnaire.  Enjoyment of reading has increased among males in some countries and decreased in others.  Is there any relationship between changes in boys’ enjoyment and changes in PISA reading scores? 

There is not.  The correlation coefficient for the two phenomena is -0.01.  Nations such as Germany raised boys’ enjoyment of reading and increased their reading scores by about 10 points on the PISA scale.  France, on the other hand, also raised boys’ enjoyment of reading, but French males’ reading scores declined by 15 points.  Ireland increased how much boys enjoy reading by a little bit but the boys’ scores fell a whopping 37 points. Poland’s males actually enjoyed reading less in 2012 than in 2000, but their scores went up more than 14 points.  No relationship.

How should policymakers proceed?  Large, cross-sectional assessments are good for measuring academic performance at one point in time.  They are useful for generating hypotheses based on observed relationships, but they are not designed to confirm or reject causality.  To do that, randomized control trials should be conducted of programs purporting to boost reading enjoyment.  Also, consider that it ultimately may not matter whether enjoying reading leads to more proficient readers.  Enjoyment of reading may be an end worthy of attainment irrespective of its relationship to achievement.  In that case, RCTs should carefully evaluate the impact of interventions on both enjoyment of reading and reading achievement, whether the two are related or not.  

Tom Loveless, a nonresident senior fellow in Governance Studies, explains his latest research on measuring achievement of American students.

“The bottom line here: the implementation of the common core has appeared to have very little impact on student achievement,” Loveless says. In this episode, he discusses whether the common core is failing our students, whether AP achievement is indicative of student success, and the role of principals as instructional leaders.

Also in this episode: Get to know Constanze Stelzenmüller, the Robert Bosch Senior Fellow in the Center on the United States and Europe, during our "Coffee Break” segment. Also stay tuned to hear the final episode in our centenary series with current and past Brookings scholars.

Show Notes:

The Brown Center Report on American Education

Brookings Centenary Timeline

Subscribe to the Brookings Cafeteria on iTunes, listen in all the usual places, and send feedback email to BCP@Brookings.edu.

The 2016 Brown Center Report (BCR), which was published last week, presented a study of Common Core State Standards (CCSS).   In this post, I’d like to elaborate on a topic touched upon but deserving further attention: what to expect in Common Core’s immediate political future. I discuss four key challenges that CCSS will face between now and the end of the year.

Let’s set the stage for the discussion.  The BCR study produced two major findings.  First, several changes that CCSS promotes in curriculum and instruction appear to be taking place at the school level.  Second, states that adopted CCSS and have been implementing the standards have registered about the same gains and losses on NAEP as states that either adopted and rescinded CCSS or never adopted CCSS in the first place.  These are merely associations and cannot be interpreted as saying anything about CCSS’s causal impact.  Politically, that doesn’t really matter. The big story is that NAEP scores have been flat for six years, an unprecedented stagnation in national achievement that states have experienced regardless of their stance on CCSS.  Yes, it’s unfair, but CCSS is paying a political price for those disappointing NAEP scores.  No clear NAEP differences have emerged between CCSS adopters and non-adopters to reverse that political dynamic.

"Yes, it’s unfair, but CCSS is paying a political price for those disappointing NAEP scores. No clear NAEP differences have emerged between CCSS adopters and non-adopters to reverse that political dynamic."

TIMSS and PISA scores in November-December

NAEP has two separate test programs.  The scores released in 2015 were for the main NAEP, which began in 1990.  The long term trend (LTT) NAEP, a different test that was first given in 1969, has not been administered since 2012.  It was scheduled to be given in 2016, but was cancelled due to budgetary constraints.  It was next scheduled for 2020, but last fall officials cancelled that round of testing as well, meaning that the LTT NAEP won’t be given again until 2024.  

With the LTT NAEP on hold, only two international assessments will soon offer estimates of U.S. achievement that, like the two NAEP tests, are based on scientific sampling:  PISA and TIMSS.  Both tests were administered in 2015, and the new scores will be released around the Thanksgiving-Christmas period of 2016.  If PISA and TIMSS confirm the stagnant trend in U.S. achievement, expect CCSS to take another political hit.  America’s performance on international tests engenders a lot of hand wringing anyway, so the reaction to disappointing PISA or TIMSS scores may be even more pronounced than what the disappointing NAEP scores generated.

Is teacher support still declining?

Watch Education Next’s survey on Common Core (usually released in August/September) and pay close attention to teacher support for CCSS.  The trend line has been heading steadily south. In 2013, 76 percent of teachers said they supported CCSS and only 12 percent were opposed.  In 2014, teacher support fell to 43 percent and opposition grew to 37 percent.  In 2015, opponents outnumbered supporters for the first time, 50 percent to 37 percent.  Further erosion of teacher support will indicate that Common Core’s implementation is in trouble at the ground level.  Don’t forget: teachers are the final implementers of standards.

An effort by Common Core supporters to change NAEP

The 2015 NAEP math scores were disappointing.  Watch for an attempt by Common Core supporters to change the NAEP math tests. Michael Cohen, President of Achieve, a prominent pro-CCSS organization, released a statement about the 2015 NAEP scores that included the following: "The National Assessment Governing Board, which oversees NAEP, should carefully review its frameworks and assessments in order to ensure that NAEP is in step with the leadership of the states. It appears that there is a mismatch between NAEP and all states' math standards, no matter if they are common standards or not.” 

Reviewing and potentially revising the NAEP math framework is long overdue.  The last adoption was in 2004.  The argument for changing NAEP to place greater emphasis on number and operations, revisions that would bring NAEP into closer alignment with Common Core, also has merit.  I have a longstanding position on the NAEP math framework. In 2001, I urged the National Assessment Governing Board (NAGB) to reject the draft 2004 framework because it was weak on numbers and operations—and especially weak on assessing student proficiency with whole numbers, fractions, decimals, and percentages.  

Common Core’s math standards are right in line with my 2001 complaint.  Despite my sympathy for Common Core advocates’ position, a change in NAEP should not be made because of Common Core.  In that 2001 testimony, I urged NAGB to end the marriage of NAEP with the 1989 standards of the National Council of Teachers of Mathematics, the math reform document that had guided the main NAEP since its inception.  Reform movements come and go, I argued.  NAGB’s job is to keep NAEP rigorously neutral.  The assessment’s integrity depends upon it.  NAEP was originally intended to function as a measuring stick, not as a PR device for one reform or another.  If NAEP is changed it must be done very carefully and should be rooted in the mathematics children must learn.  The political consequences of it appearing that powerful groups in Washington, DC are changing “The Nation’s Report Card” in order for Common Core to look better will hurt both Common Core and NAEP.

Will Opt Out grow?

Watch the Opt Out movement.  In 2015, several organized groups of parents refused to allow their children to take Common Core tests.  In New York state alone, about 60,000 opted out in 2014, skyrocketing to 200,000 in 2015.  Common Core testing for 2016 begins now and goes through May.  It will be important to see whether Opt Out can expand to other states, grow in numbers, and branch out beyond middle- and upper-income neighborhoods.

Conclusion

Common Core is now several years into implementation.  Supporters have had a difficult time persuading skeptics that any positive results have occurred. The best evidence has been mixed on that question.  CCSS advocates say it is too early to tell, and we’ll just have to wait to see the benefits.  That defense won’t work much longer.  Time is running out.  The political challenges that Common Core faces the remainder of this year may determine whether it survives.

Hypocrisy is not scarce in the world of politics. But the current House and Senate budget resolutions set new lows. Each proposes to cut about $5 trillion from government spending over the next decade in pursuit of a balanced budget. Whatever one may think of putting the goal of reducing spending when the ratio of the debt-to-GDP is projected to be stable above investing in the nation’s future, you would think that deficit-reduction hawks wouldn’t cut spending that has been proven to lower the deficit.

Yes, there are expenditures that actually lower the deficit, typically by many dollars for each dollar spent. In this category are outlays on ‘program integrity’ to find and punish fraud, tax evasion, and plain old bureaucratic mistakes. You might suppose that those outlays would be spared. Guess again. Consider the following:

Medicare. Roughly 10% of Medicare’s $600 billion budget goes for what officials delicately call ‘improper payments, according to the 2014 financial report of the Department of Health and Human Services. Some are improper merely because providers ‘up-code’ legitimate services to boost their incomes. Some payments go for services that serve no valid purpose. And some go for phantom services that were never provided. Whatever the cause, approximately $60 billion of improper payments is not ‘chump change.’

Medicare tries to root out these improper payments, but it lacks sufficient staff to do the job. What it does spend on ‘program integrity’ yields an estimated $14.40? for each dollar spent, about $10 billion a year in total. That number counts only directly measurable savings, such as recoveries and claim denials. A full reckoning of savings would add in the hard-to-measure ‘policeman on the beat’ effect that discourages violations by would-be cheats.

Fat targets remain. A recent report from the Institute of Medicine presented findings that veritably scream ‘fraud.’ Per person spending on durable medical equipment and home health care is ten times higher in Miami-Dade County, Florida than the national average. Such equipment and home health accounts for nearly three-quarters of the geographical variation in per person Medicare spending. Yet, only 4% of current recoveries of improper payments come from audits of these two items and little from the highest spending locations.

Why doesn’t Medicare spend more and go after the remaining overpayments, you may wonder? The simple answer is that Congress gives Medicare too little money for administration. Direct overhead expenses of Medicare amount to only about 1.5% of program outlays—6% if one includes the internal administrative costs of private health plans that serve Medicare enrollees. Medicare doesn’t need to spend as much on administration as the average of 19% spent by private insurers, because for example, Medicare need not pay dividends to private shareholders or advertise.

But spending more on Medicare administration would both pay for itself—$2 for each added dollar spent, according to the conservative estimate in the President’s most recent budget—and improve the quality of care. With more staff, Medicare could stop more improper payments and reduce the use of approved therapies in unapproved ways that do no good and may cause harm.

Taxes. Compare two numbers: $540 billion and $468 billion. The first number is the amount of taxes owed but not paid. The second number is the projected federal budget deficit for 2015, according to the Congressional Budget Office.

Collecting all taxes legally owed but not paid is an impossibility. It just isn’t worth going after every violation. But current enforcement falls far short of practical limits. Expenditures on enforcement directly yields $4 to $6 for each dollar spent on enforcement. Indirect savings are many times larger—the cop-on-the-beat effect again. So, in an era of ostentatious concern about budget deficits, you would expect fiscal fretting in Congress to lead to increased efforts to collect what the law says people owe in taxes.

Wrong again. Between 2010 and 2014, the IRS budget was cut in real terms by 20%. At the same time, the agency had to shoulder new tasks under health reform, as well as process an avalanche of applications for tax exemptions unleashed by the 2010 Supreme Court decision in the Citizens United case. With less money to spend and more to do, enforcement staff dropped by 15% and inflation adjusted collections dropped 13%.

One should acknowledge that enforcement will not do away with most avoidance and evasion. Needlessly complex tax laws are the root cause of most tax underpayment. Tax reform would do even more than improved administration to increase the ratio of taxes paid to taxes due. But until that glorious day when Congress finds the wit and will to make the tax system simpler and fairer, it would behoove a nation trying to make ends meet to spend $2 billion to $3 billion more each year to directly collect $10 billion to 15 billion a year more of legally owed taxes and, almost certainly, raise far more than that by frightening borderline scoff-laws.

Disability Insurance. Thirteen million people with disabling conditions who are judged incapable of engaging in substantial gainful activity received $161 billion in disability insurance in 2013. If the disabling conditions improve enough so that beneficiaries can return to work, benefits are supposed to be stopped. Such improvement is rare. But when administrators believe that there is some chance, the law requires them to check. They may ask beneficiaries to fill out a questionnaire or, in some cases, undergo a new medical exam at government expense. Each dollar spent in these ways generated an estimated $16 in savings in 2013.

Still, the Social Security Administration is so understaffed that SSA has a backlog of 1.3 million disability reviews. Current estimates indicate that spending a little over $1 billion a year more on such reviews over the next decade would save $43 billion. Rather than giving Social Security the staff and spending authority to work down this backlog and realize those savings, Congress has been cutting the agency’s administrative budget and sequestration threatens further cuts.

Claiming that better administration will balance the budget would be wrong. But it would help. And it would stop some people from shirking their legal responsibilities and lighten the burdens of those who shoulder theirs. The failure of Congress to provide enough staff to run programs costing hundreds of billions of dollars a year as efficiently and honestly as possible is about as good a definition of criminal negligence as one can find.

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 eurozone has three problems: national debt obligations that cannot be met, medium-term imbalances in trade competitiveness, and long-term structural flaws.

The short-run problem requires more of the monetary easing that Germany has, with appalling shortsightedness, been resisting, and less of the near-term fiscal restraint that Germany has, with equally appalling shortsightedness, been seeking. To insist that Greece meet all of its near-term current debt service obligations makes about as much sense as did French and British insistence that Germany honor its reparations obligations after World War I. The latter could not be and were not honored. The former cannot and will not be honored either.

The medium-term problem is that, given a single currency, labor costs are too high in Greece and too low in Germany and some other northern European countries. Because adjustments in currency values cannot correct these imbalances, differences in growth of wages must do the job—either wage deflation and continued depression in Greece and other peripheral countries, wage inflation in Germany, or both. The former is a recipe for intense and sustained misery. The latter, however politically improbable it may now seem, is the better alternative.

The long-term problem is that the eurozone lacks the fiscal transfer mechanisms necessary to soften the effects of competitiveness imbalances while other forms of adjustment take effect. This lack places extraordinary demands on the willingness of individual nations to undertake internal policies to reduce such imbalances. Until such fiscal transfer mechanisms are created, crises such as the current one are bound to recur.

Present circumstances call for a combination of short-term expansionary policies that have to be led or accepted by the surplus nations, notably Germany, who will also have to recognize and accept that not all Greek debts will be paid or that debt service payments will not be made on time and at originally negotiated interest rates. The price for those concessions will be a current and credible commitment eventually to restore and maintain fiscal balance by the peripheral countries, notably Greece.

Medicare Hospital Insurance and Social Security would not add to deficits because they can’t spend money they don’t have.

The dog days of August have given way to something much worse. Congress returned to session this week, and the rest of the year promises to be nightmarish. The House and Senate passed budget resolutions earlier this year calling for nearly $5 trillion in spending cuts by 2025. More than two-thirds of those cuts would come from programs that help people with low-and moderate-incomes. Health care spending would be halved. If such cuts are enacted, the president will likely veto them. At best, another partisan budget war will ensue after which the veto is sustained. At worst, the cuts become law.

The putative justification for these cuts is that the nation faces insupportable increases in public debt because of expanding budget deficits. Even if the projections were valid, it would be prudent to enact some tax increases in order to preserve needed public spending. But the projections of explosively growing debt are not valid. They are fantasy.

Wait! you say. The Congressional Budget Office has been telling us for years about the prospect of rising deficit and exploding debt. They repeated those warnings just two months ago. Private organizations of both the left and right agree with the CBO’s projections, in general if not in detail. How can any sane person deny that the nation faces a serious long-term budget deficit problem?

The answer is simple: The CBO and private organizations use a convention in preparing their projections that is at odds with established policy and law. If, instead, projections are based on actual current law, as they claim to be, the specter of an increasing debt burden vanishes. What is that convention? Why is it wrong? Why did CBO adopt it, and why have others kept it?

CBO’s budget projections cover the next 75 years. Its baseline projections claim to be based on current law and policy. (CBO also presents an ‘alternative scenario’ based on assumed changes in law and policy). Within that period, Social Security (OASDI) and Medicare Hospital Insurance (HI) expenditures are certain to exceed revenues earmarked to pay for them. Both are financed through trust funds. Both funds have sizeable reserves — government securities — that can be used to cover short falls for a while. But when those reserves are exhausted, expenditures cannot exceed current revenues. Trust fund financing means that neither Social Security nor Medicare Hospital Insurance can run deficits. Nor can they add to the public debt.

Nonetheless, CBO and other organizations assume that Social Security and Medicare Hospital Insurance can and will spend money they don’t have and that current law bars them from spending.

One of the reasons why trust fund financing was used, first for Social Security and then for Medicare Hospital Insurance, was to create a framework that disciplined Congress earmarked to earmark sufficient revenues to pay for benefits it might award. Successive presidents and Congresses, both Republican and Democratic, have repeatedly acted to prevent either program’s cumulative spending from exceeding cumulative revenues. In 1983, for example, faced with an impending trust fund shortfall, Congress cut benefits and raised taxes enough to turn prospective cash flow trust fund deficits into cash flow surpluses. And President Reagan signed the bill. In so doing, they have reaffirmed the discipline imposed by trust fund financing.

Trust fund accounting explains why people now are worrying about the adequacy of funding for Social Security and Medicare. They recognize that the trust funds will be depleted in a couple of decades. They understand that between now and then Congress must either raise earmarked taxes or fashion benefit cuts. If it doesn’t raise taxes, benefits will be cut across the board. Either way, the deficits that CBO and other organizations have built into their budget projections will not materialize.

The implications for projected debt of CBO’s inclusion in its projections of deficits that current law and established policy do not allow are enormous, as the graph below shows.

If one excludes deficits in Social Security and Medicare Hospital Insurance that cannot occur under current law and established policy, the ratio of national debt to gross domestic product will fall, not rise, as CBO budget projections indicate. In other words, the claim that drastic cuts in government spending are necessary to avoid calamitous budget deficits is bogus.

It might seem puzzling that CBO, an agency known for is professionalism and scrupulous avoidance of political bias, would adopt a convention so at odds with law and policy. The answer is straightforward—Congress makes them do it. Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 requires CBO to assume that the trust funds can spend money although legislation governing trust fund operations bars such expenditures. CBO is obeying the law.

No similar explanation exonerates the statement of the Committee for a Responsible Federal Budget, which on August 25, 2015 cited, with approval, the conclusion that ‘debt continues to grow unsustainably,’ or that of the Bipartisan Policy Center, which wrote on the same day that ‘America’s debt continues to grow on an unsustainable path.’ Both statements are wrong.

To be sure, the dire budget future anticipated in the CBO projections could materialize. Large deficits could result from an economic calamity or war. Congress could abandon the principle that Social Security and Medicare Hospital Insurance should be financed within trust funds. It could enact other fiscally rash policies. But such deficits do not flow from current law or reflect the trust fund discipline endorsed by both parties over the last 80 years. And it is current law and policy that are supposed to underlie budget projections. Slashing spending because a thirty-year old law requires CBO to assume that Congress will do something it has shown no sign of doing—overturn decades of bipartisan prudence requiring that the major social insurance programs spend only money specifically earmarked for them, and not a penny more—would impose enormous hardship on vulnerable populations in the name of a fiscal fantasy.

Editor's Note: This post originally appeared in Fortune Magazine.

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.

We can be sure that the 2016 presidential candidates, whoever they are, will be in favor of promoting opportunity and cutting poverty. The question is: how? In our contribution to a new volume published today, “Campaign 2016: Eight big issues the presidential candidates should address,” we show that people who clear three hurdles—graduating high school, working full-time, and delaying parenthood until they in a stable, two-parent family—are very much more likely to climb to middle class than fall into poverty:

But what specific policies would help people achieve these three benchmarks of success?  Our paper contains a number of ideas that candidates might want to adopt. Here are a few examples: 

1. To improve high school graduation rates, expand “Small Schools of Choice,” a program in New York City, which replaced large, existing schools with more numerous, smaller schools that had a theme or focus (like STEM or the arts). The program increased graduation rates by about 10 percentage points and also led to higher college enrollment with no increase in costs.

2. To support work, make the Child and Dependent Care Tax Credit (CDCTC) refundable and cap it at $100,000 in household income. Because the credit is currently non-refundable, low-income families receive little or no benefit, while those with incomes above $100,000 receive generous tax deductions. This proposal would make the program more equitable and facilitate low-income parents’ labor force participation, at no additional cost.

3. To strengthen families, make the most effective forms of birth control (IUDs and implants) more widely available at no cost to women, along with good counselling and a choice of all FDA-approved methods. Programs that have done this in selected cities and states have reduced unplanned pregnancies, saved money, and given women better ability to delay parenthood until they and their partners are ready to be parents. Delayed childbearing reduces poverty rates and leads to better prospects for the children in these families.

These are just a few examples of good ideas, based on the evidence, of what a candidate might want to propose and implement if elected. Additional ideas and analysis will be found in our longer paper on this topic.

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. 

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.

Today marks Equal Pay Day. How are we doing? We have come a long way since I wrote my doctoral dissertation on the pay gap back in the late 1960s. From earning 59 percent of what men made in 1974 to earning 79 percent in 2015 (among year-round, full-time workers), women have broken a lot of barriers. 

There is no reason why the remaining gap can’t be closed. The gap could easily move in favor of women. After all, they are now better educated than men. They earn 60 percent of all bachelor’s degrees and the majority of graduate degrees. Adjusting for educational attainment, the current earnings gap widens, with the biggest relative gaps at the highest levels of education:

If we want to encourage people to get more education, we can't discriminate against the best educated just because they are women.

One source of the current gap is the fact that women still take more time off from work to care for their families. These family responsibilities may also affect the kinds of work they choose. Harvard professor Claudia Goldin notes that they are more likely to work in occupations where it is easier to combine work and family life. These divided work-family loyalties are holding women back more than pay discrimination per se. This should change when men are more willing to share equally on the home front, as Richard Reeves and I have argued elsewhere.  

But there is much to be done while waiting for this more egalitarian world to arrive. Paid family leave and more support for early child care and education would go a long way toward relieving families, and women in particular, of the dual burden they now face. In the process, the pay gap should shrink or even move in favor of women. 

The Economic Policy Institute (EPI) has just released a very informative report on these issues. They call for an aggressive expansion of both early childhood education and child care subsidies for low and moderate income families. Specifically, they propose to cap child care expenses at 10 percent of income, which would provide an average subsidy of $3,272 to working families with children and much more than this to lower-income families. 

The EPI authors argue that child care subsidies would provide needed in-kind benefits to lower income families (check!), boost women’s labor force participation in a way that would benefit the overall economy (check!), and reduce the gender pay gap (check!). In short, childcare subsidies are a win-win-win.

For present purposes I want to focus on the likely effects on the pay gap. In the mid-1990s, the U.S. had the highest rate of female labor force participation compared to Germany, Canada, and Japan. Now we have the lowest. One reason is because other advanced countries have expanded paid leave and child care support for employed mothers while the U.S. has not:

If we want to eliminate the pay gap and perhaps even reverse it, the primary focus must be on women’s continuing difficulties in balancing work and family life. We should certainly attend to any remaining instances of pay discrimination in the workplace, as called for in the Paycheck Fairness Act. But the biggest source of the problem is not employer discrimination; it is women’s continued double burden.

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).

The Horatio Alger ideal of upward mobility has a strong grip on the American imagination (Reeves 2014). But recent years have seen growing concern about the distance between the rhetoric of opportunity and the reality of intergenerational mobility trends and patterns.

The related issues of equal opportunity, intergenerational mobility, and inequality have all risen up the agenda, for both scholars and policymakers. A growing literature suggests that the United States has fairly low rates of relative income mobility, by comparison to other countries, but also wide variation within the country. President Barack Obama has described the lack of upward mobility, along with income inequality, as “the defining challenge of our time.” Speaker Paul Ryan believes that “the engines of upward mobility have stalled.”

But political debates about equality of opportunity and social and economic mobility often provide as much heat as light. Vitally important questions of definition and motivation are often left unanswered. To what extent can “equality of opportunity” be read across from patterns of intergenerational mobility, which measure only outcomes? Is the main concern with absolute mobility (how people fare compared to their parents)—or with relative mobility (how people fare with regard to their peers)? Should the metric for mobility be earnings, income, education, well-being, or some other yardstick? Is the primary concern with upward mobility from the bottom, or with mobility across the spectrum?

In this paper, we discuss the normative and definitional questions that guide the selection of measures intended to capture “equality of opportunity”; briefly summarize the state of knowledge on intergenerational mobility in the United States; describe a new microsimulation model designed to examine the process of mobility—the Social Genome Model (SGM); and how it can be used to frame and measure the process, as well as some preliminary estimates of the simulated impact of policy interventions across different life stages on rates of mobility.

The three steps being taken in mobility research can be described as the what, the why, and the how. First, it is important to establish what the existing patterns and trends in mobility are. Second, to understand why they exist—in other words, to uncover and describe the “transmission mechanisms” between the outcomes of one generation and the next. Third, to consider how to weaken those mechanisms—or, put differently, how to break the cycles of advantage and disadvantage.

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On December 17, 2014, President Barack Obama and President Raúl Castro announced that the United States and Cuba would seek to reestablish diplomatic relations. Since then, the two countries have engaged in bilateral negotiations in Havana and Washington, the United States has made several unilateral policy changes to facilitate greater trade and travel between the two countries, and bipartisan legislation has been introduced in the U.S. Congress to lift the travel ban. Meanwhile, conversations are ongoing about ending the 50-plus-year embargo and Cuba has continued the process of updating its economic system, including establishing new rules for foreign investment and the emerging private sector.

In light of the significant shifts underway in the U.S.-Cuba relationship, new questions arise about Cuba’s development model, and its economic relations with the region and the world. On Tuesday, June 2, the Latin America Initiative at Brookings hosted a series of panel discussions with various experts including economists, lawyers, academics, and practitioners to examine opportunities and challenges facing Cuba in this new context. Panels examined macroeconomic changes underway in Cuba, how to finance Cuba’s growth, the emerging private sector, and themes related to much-needed foreign investment.

Join the conversation on Twitter using #CubaGrowth

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• Panel 1: Trends in the Cuban economy in light of the new U.S.-Cuba context
• Panel 2: Financing Cuba’s growth, development, and trade
• Panel 3: Next steps for Cuba’s emerging private Sector–Cuentapropistas and cooperatives
• Panel 4: A New stage in foreign direct investment

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• Rethinking Cuba: New opportunities for development - Part 1 (English)
• Rethinking Cuba: New opportunities for development - Part 2 (English)
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• Rethinking Cuba: New opportunities for development - Part 2 (español)

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In advance of President Obama’s historic trip to Cuba and Argentina, three Brookings scholars participated in a media roundtable to offer context and outline their expectations for the outcomes of the trip. Richard Feinberg and Ted Piccone discussed Cuba–including developments in the U.S.-Cuba relationship, the Cuban economy, and human rights on the island–and Harold Trinkunas offered insight on Argentina, inter-American relations, and the timing of the visit.

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Richard Feinberg:

The idea is to promote a gradual incremental transition to a more open, pluralistic and prosperous Cuba integrated into global markets of goods, capital, and ideas. It is a long-term strategy. It cannot be measured by quarterly reports.

Ted Piccone:

...the key [is] to unlock a whole set of future changes that I think will be net positive for the United States, but it is going to take time, and it is not going to happen overnight.

Harold Trinkunas:

Cuba is really about moving, among other things, a stumbling block to better relations with Latin America, and Argentina is about restoring a positive relationship with a key swing state in the region that was once one of our most important allies in the region.

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Professor Riek Machar, former vice president of South Sudan and now leader of the rebel group that is fighting the government of South Sudan for control of the apparatus of the government, has publicly threatened to capture and take control of both the capital city of Juba and the oil-producing regions of the country. Branding South Sudan’s president, Salva Kiir, a “dictator” and arguing that he does not recognize the need to share power, Professor Machar stated that the present conflict, which has lasted for more than five months and resulted in the killing of many people and the destruction of a significant amount of property, will not end until Kiir is chased out of power.

Violent mobilization by groups loyal to Machar against the government in Juba began in December 2013. It was only after bloody confrontations between the two parties that targeted civilians based on their ethnicity had resulted in the deaths of many people (creating a major humanitarian crisis) that a cease-fire agreement was signed in Addis Ababa on January 23, 2014, with the hope of bringing to an end the brutal fighting. The cease-fire, however, was seen only as the first step towards negotiations that were supposed to help the country exit the violent conflict and secure institutional arrangements capable of guaranteeing peaceful coexistence.

If Machar and his supporters have the wherewithal to carry out the threats and successfully do so, there is no guarantee that peace would be brought to the country. For one thing, any violent overthrow of the government would only engender more violence as supporters of Kiir and his benefactors are likely to regroup and attempt to recapture their lost political positions. What South Sudan badly needs is an institutionalization of democracy and not a government led by political opportunists. In fact, an effective strategy to exit from this incessant violence must be centered around the election of an inclusive interim government—minus both Kiir and Machar—that would engage all of the country’s relevant stakeholders in negotiations to create a governing process that adequately constrains the state, establishes mechanisms for the peaceful resolution of conflict, enhances peaceful coexistence, and provides an enabling environment for the rapid creation of the wealth needed to deal with poverty and deprivation.

On March 9, 2012, less than a year after South Sudan gained independence, then-Vice President Machar met with several Brookings scholars, including myself, in New York City. The meeting was part of the new country’s efforts to seek assistance from its international partners to address complex and longstanding development challenges, including critical issues such as the effective management of the country’s natural resource endowments, gender equity, the building of government capacity to maintain law and order, the provision of other critical public goods and services, and poverty alleviation. Among participants in this critical consultation were Mwangi S. Kimenyi, senior fellow and director of the Africa Growth Initiative (AGI) at the Brookings Institution; Witney Schneidman, AGI nonresident fellow and former deputy assistant secretary of state for African Affairs; and me. The vice president, who appeared extremely energetic and optimistic about prospects for sustainable development in the new country, requested an analysis of the commitments and achievements that the government of South Sudan had made since independence and suggestions for a way forward. The scholars, working in close collaboration with their colleagues at Brookings, produced a policy report requested by the vice president. The report entitled, South Sudan: One Year After Independence—Opportunities and Obstacles for Africa’s Newest Country, was presented at a well-attended public event on July 28, 2012. Panelists included Peter Ajak, director of the Center for Strategic Analyses and Research in Juba; Ambassador Princeton Lyman, U.S. special envoy for South Sudan and Sudan; Nada Mustafa Ali scholar at the New School for Social Research; Mwangi S. Kimenyi and me.

The report provided a comprehensive review of the policy issues requested by the vice president—the provision of basic services; future engagement between South Sudan and the Republic of Sudan; efficient and equitable management of natural resources; ethnic diversity and peaceful coexistence; federalism; eradication of corruption; and the benefits of regional integration. Most important is the fact that the report placed emphasis on the need for the government of South Sudan to totally reconstruct the state inherited from the Khartoum government through democratic constitution making and produce a governing process that (i) guarantees the protection of human and fundamental rights, including those of vulnerable groups (e.g., women, minority ethnic groups); (ii) adequately constrains the government (so that impunity, corruption and rent seeking are minimized); (iii) enhances entrepreneurial activities and provides the wherewithal for wealth creation and economic growth; and (iv) establishes mechanisms for the peaceful resolution of conflict and creates an environment within which all of the country’s diverse population groups can coexist peacefully.

Unfortunately, when the report was completed, members of the ruling Sudan People’s Liberation Movement were already embroiled in a brutal power struggle that eventually led to President Kiir sacking his entire cabinet, including the vice president. The collapse of the government raised the prospects of violent and destructive mobilization by groups that felt the president’s actions were marginalizing them both economically and politically. The ensuing chaos created an environment that was hardly conducive to the implementation of policies such as those presented in the Brookings report.

The government of Sudan has failed to engage in the type of robust institutional reforms that would have effectively prevented President Kiir and his government from engaging in the various opportunistic policies that have been partly responsible for the violence that now pervades the country. South Sudan’s diverse ethnic groups put forth a united front in their war against Khartoum for self-determination. Following independence, the new government engaged in state formation processes that did not provide mechanisms for all individuals and groups to compete fairly for positions in the political and economic systems. Instead, the government’s approach to state formation politicized ethnic cleavages and made the ethnic group the basis and foundation for political, and to a certain extent, economic participation. This approach has created a "sure recipe for breeding ethnic antagonism," and has led to the crisis that currently consumes the country.

While the most important policy imperative in South Sudan today is the need to make certain that the cease-fire continues to hold, long-term prospects for peaceful coexistence and development call for comprehensive institutional reforms to provide the country with a governing process that guarantees the rule of law. Hence, both the opposition and the government—the two sides in the present conflict—should take advantage of the cease-fire and start putting together the framework that will eventually be used to put the state back together. A new interim government, without the participation of the two protagonists—Kiir and Machar—should be granted the power to bring together all of the country’s relevant stakeholders to reconstitute and reconstruct the state, including negotiating a permanent constitution.

Dear South Sudan's Leaders:

Today, the country that all of you and your fellow citizens fought to establish is at a crossroads. And you, the country’s leaders, are now standing at the proverbial “fork in the road.” The question now is: Which road will each of you take? Your choice will determine not only your place in history but will significantly impact the future of your shared country, its diverse peoples and your neighbors. Each of you can choose to chase after personal power, primitive accumulation, and self-enrichment—using the ethnic group that you belong to as a foundation for that quest. This disastrous decision would plunge your country further into violent and destructive mobilization, effectively shutting the door to the type of state formation that is undergirded by a desire to achieve national integration, peaceful coexistence and sustainable development. Alternatively, each of you can opt to maximize a different value, one that places you among the world’s greatest leaders—that is, those who, when they came to the fork in the road, chose to lead their people down the road of opportunities for peaceful coexistence, prosperity and liberty.

As the citizens of South Sudan watch and wait in utter fear and disgust, it is time for you, the country’s leaders, to decide whether you want to lead them into a future filled with unending violence, hunger, and desolation, or into one where all of the country’s various peoples, regardless of their ethnic or religious affiliation, gender, and economic status, can live together peacefully and pursue their values and interests without molestation from others.

In the early 1990s, Nelson Mandela and his compatriots found themselves at a similar crossroads. They chose not to act opportunistically and retreat to their various ethnic enclaves.  Like the great leaders that history has proven them to be, they knew that, as apparently beneficial as such an option would have been to them, they would have plunged their country into an abyss from which it was unlikely to recover anytime soon. Instead, they chose the road that led them and their country to the type of state formation that is undergirded by institutional arrangements that provide an enabling environment for wealth creation and economic growth. That is why, today, the country that they founded has one of the world’s most progressive and human-rights friendly constitutions.

South Sudan is a new and relatively underdeveloped country, but it has the potential to emerge as a highly developed and peaceful one. However, in order for that potential to be fully exploited and used effectively to enhance development, the latter must be provided with institutional arrangements that guarantee the rule of law.

To you, the leaders of this new country: All of you can gracefully exit the scene, serve as elder statesmen, and provide the country’s new crop of leaders with the type of advice and support that can help the country successfully emerge from its violent and destructive past, as well as chart a path towards peace, sustainable economic growth and development, and equitable and fair allocation of national resources.

How will history judge you? As tyrants, opportunists, despots, exploiters, and oppressors, who used their public positions to grab power and riches for themselves or as public servants who spearheaded and led the transformative processes that brought peace, security, and development to their country? The choice is yours.

Posterity will judge you well, but only if you choose wisely!

On Tuesday, October 28, 2014, tens of thousands of citizens of Burkina Faso gathered in its capital city, Ouagadougou, and its second biggest city, Bobo Dioulasso, to protest proposed changes to its constitution regarding term limits. A vote was planned for Thursday, on whether to extend the current limit of two terms to three. This vote is extremely controversial:  Current President Blaise Compaoré, who came to power in a coup in 1987, has ruled the country for 27 years. Allowing him to run for election in November 2015 could extend his reign for another five years. In Ouagadougou on Wednesday, citizens angry over the possibility that parliament might make it possible for Campaoré to stay in power indefinitely set fire to the parliament and forced legislators to postpone the vote that had been set for Thursday, October 30, 2014 to decide the constitutional issue.

The West African country has been plagued by dictators, autocracies and coups in the past. At independence on August 5, 1960, Maurice Yaméogo, leader of the Voltaic Democratic Union (Union démocratique voltaïque), became the country’s first president. Shortly after assuming power, Yaméogo banned all political opposition, forcing mass riots and demonstrations that only came to an end after the military intervened in 1966. Lt. Col. Sangoulé Lamizana and a collection of military elites took control of the government and subsequently dissolved the National Assembly as well as suspended the constitution. Lamizana stayed in power until November 1980 when the military overthrew the government and installed Col. Saye Zerbo as the new president. Two years later, Col. Zerbo’s government was overthrown by Maj. Dr. Jean-Baptiste Ouédraogo and the Council of Popular Salvation (CSP—Conseil du salut du peuple). Although it promised to transition the country to civilian rule and provide a new constitution, the Ouédraogo regime banned all political organizations, including opposition parties. There soon arose a political struggle within the CSP. The radicals, led by Captain Thomas Sankara, eventually overthrew the government in August 1983, and Capt. Sankara emerged as the country’s new leader. In 1984, the Sankara government changed the country’s name from Upper Volta to Burkina Faso and introduced many institutional reforms that effectively aligned the country with Marxist ideals.

On October 15, 1987, Capt. Blaise Compaoré, a former colleague of Sankara’s, killed Sankara and several of his confidants in a successful coup d’état. In 1991, Campaoré was elected president in an election in which only 25 percent of the electorate participated because of a boycott movement organized and carried out by opposition parties. In 1998, he won reelection for another seven-year term. As president, Campaoré reversed all the progressive policies that Sankara had implemented.

In 2000, the country’s post-Cold War 1991 constitution was amended to impose a limit of two five-year consecutive terms on the presidency. However, Campaoré’s supporters argued that because he was in office when the amendments went into effect, they did not apply to him and, hence, he was qualified to run for re-election in 2005. Despite the fact that the opposition fielded several candidates, Campoaré won 80.35 percent of the votes cast in the 2005 presidential election. And, in the presidential elections held in November 2010, he captured 80.2 percent of votes.

Over more than a quarter century in power, Campaoré has used an unusual formula to achieve relative stability in Burkina Faso—authoritarianism mixed with traces of democracy. The complex governance system has relied primarily on Campaoré’s dominant and charismatic political power and has failed to build sustainable institutions—specifically, those capable of maintaining the rule of law and enhancing peaceful coexistence in his absence.

Constitutionally mandated presidential term limits strengthen the rule of law and provide a significant level of stability and predictability to the country’s governance institutions. In response to the efforts by Burkinabé members of parliament to change the constitution to enable Compaoré to secure another term in office, U.S. government officials have recently stated that “democratic institutions are strengthened when established rules are adhered to with consistency.” On his part, Campaoré has proclaimed that his main and immediate concern “is not to build a future for myself—but to see how the future of this country will take shape.” If this is indeed true, then he should exit gracefully from the Burkinabé political scene and henceforth serve as an elder statesman, providing his country’s new leadership with the advice and support that they need to deepen and institutionalize democracy, as well as enhance economic, social, political and human development.

Insisting, as President Campoaré has done, that the constitution be changed so that he can seek an additional term in power not only destroys the country’s fragile stability but also sends the wrong message to citizens about the rule of law—while citizens must be law-abiding, the president does not have to abide by the country’s settled law; if the law stands in the way of the president’s personal ambitions, he can simply change the law to provide him with the wherewithal to achieve those objectives. Such behavior from the country’s chief executive does not augur well for deepening the country’s democracy, an objective that is dear to many Burkinabé. The question to ask President Campoaré is: How do you want history to remember you? As a self-serving political opportunist who used his public position to accumulate personal power and wealth, at the expense of fellow citizens, or as a public servant who led and directed his country’s transformation into a peaceful, safe and productive society?

Crisis seems to be the byword for Brazil today: political crisis, economic crisis, corruption crisis. Even the 2016 Rio Olympics seem to teeter on the edge of failure, according to the governor of the state of Rio de Janeiro. Yet despite the steady drum beat of grim news, Brazil is more than likely to resume its upward trajectory within a few years. Its present economic and political troubles mask a number of positives: the strength of its democracy and a new found willingness to fight corruption at all costs. With the correct policies in place, its economy will recover in due course. The impeachment process against Dilma Rousseff will soon be over, one way or the other. The present troubles are merely a temporary detour on Brazil’s long quest to achieve major power status and a consequential role in the international system. In a world in turmoil, where geopolitical tensions are on the rise and the fabric of international politics is stressed by events such as Brexit, we should not lose sight of Brazil’s history of and potential for contributing to sustaining the liberal international order.

Brazil’s aspirations for greatness

Brazil has long aspired to grandeza (greatness) both at home and abroad. As its first ambassador to Washington, Joaquim Nabuco (1905-1910) once said, “Brazil has always been conscious of its size, and it has been governed by a prophetic sense with regard to its future.” As we document in our new book, Brazil has reached for major power status at least four times in the past 100 years: participating as a co-belligerent with the Allies in World War One and seeking a permanent seat on the Council of the League of Nations thereafter; joining the Allies in World War II and aspiring to a permanent seat on the United Nations Security Council (UNSC) in 1945; mastering nuclear technology beginning in the 1970s, including launching a covert military program (now terminated) to build a nuclear explosive device; and most recently, beginning with the presidency of Luiz Inácio Lula da Silva (2003-2011), seeking to become a leader in multilateral institutions, including actively campaigning for a permanent seat on the UNSC.

A decade ago, many Brazilians believed that this time their country was poised to secure its position as a major power. As the seventh largest economy in the world with the 10th largest defense budget and significant soft power, Brazilian leaders such as Lula saw their country as being “in the mix” of major powers who, while not able to make the international order alone, could very well shape its evolution through uncertain times together with other major powers. Certainly, they no longer saw Brazil as one of the middle or small powers, the “order takers” in the international system.

Brazil saw a new opportunity to emerge as a major power in the advent of a relatively stable and peaceful post-Cold War geopolitical order, the decade-long commodity boom that supercharged its economy after 2002, and the rise of the BRICS (Brazil, Russia, India, China, and South Africa). Between 2002 and 2013, Brazil’s virtuous trifecta—democratic consolidation, rapid economic growth, and reduced inequality—was a boon to its soft power. This combination was highly attractive to many in the developing world, contributing to Brazil’s claim to leadership on the international stage as a bridge between the global South and the great powers. International peace and stability particularly favored Brazil’s predilection for deploying soft power rather than hard power. And in the BRICS, Brazil saw an opportunity to work together with other emerging powers critical of the present international order to advance its agenda for reformed global institutions.

Rethinking Brazil’s approach to global influence

Brazil’s bridge-building strategy was effective in advancing its national interests in multilateral forums, most recently on global internet governance and global climate change. But the BRICS dimension of Brazil’s strategy detracted from its ability to influence the world’s great democracies. The BRICS identity associated Brazil with authoritarian powers—China and Russia—that were viewed by the United States and its allies, at best, as unhelpful critics and, at worst, as deliberate saboteurs of the present order. This undermined Brazil’s credibility with Washington and other leading democracies, and hindered its ability to advance its preferred policies on everything from nonproliferation to the reform of global economic institutions to the debate on humanitarian intervention. In retrospect, working more closely with other emerging democracies that seek reform of the international order, such as through the India-Brazil-South Africa association known as IBSA, would have more clearly signaled Brazil’s constructive intentions while still preserving its critical posture.

Today, the opportunities that powered Brazil’s most recent rise—post-Cold War geopolitical stability and a massive commodity boom—are receding, replaced by a more fractious and dangerous international system. Despite troubles at home, it is not too early for Brazil’s leaders to think anew about how to strengthen national capabilities and deploy them strategically to address this new environment. This includes fortifying domestic institutions, both to address the present crisis but also to restore the luster of Brazil’s soft power. It means bolstering Brazil’s hard power capabilities once the economy improves and deploying them in ways that contribute to its soft power, for example by taking on additional responsibility for leading critical international peacekeeping operations as it has in Haiti. It means thinking carefully about how to signal to the democratic great powers Brazil’s commitment to a strengthened liberal international order, even as it holds onto its own principles and works towards reform of multilateral institutions. And eventually, as Brazil completes its recovery, it means contributing more substantially to the costs of maintaining its preferred global order. A Brazil that achieves all this will be well positioned to have a positive global impact, continuing to be a strong (if sometimes critical) partner for the United States in shaping the international order.

The recent outbreak of hostilities between Israel and Hamas is a serious setback to ongoing Turkish-Israeli normalization efforts. Israel launched Operation Protective Edge, its third operation against Hamas since leaving Gaza in 2005, in response to rockets and missiles fired by Hamas from Gaza into Israel. As in Israel’s two previous Gaza campaigns, Operation Cast Lead (2008-09) and Operation Pillar of Defense (2012), Turkey quickly condemned Israel’s actions, yet offered to mediate, together with Qatar, between Israel and Hamas.

After Turkish Prime Minister Recep Tayyip Erdogan, in the midst of his presidential campaign, equated Israeli policy towards Gaza to a “systematic genocide” and accused Israel of surpassing “Hitler in barbarism,” Israel accepted an Egyptian cease-fire proposal. Israeli Foreign Minister Avigdor Lieberman accused Turkey and Qatar of “sabotaging the cease-fire proposal,” and Israeli Prime Minister Benjamin Netanyahu complained to U.S. Secretary of State John Kerry about Erdogan’s statements.

Turkish leaders’ harsh rhetoric sparked violent demonstrations in front of Israel’s embassy in Ankara and its consulate in Istanbul, lead the Israeli government to evacuate diplomats’ families, and issue a travel warning advising against travel to Turkey, which prompted numerous cancellations of tourist travel. On Sunday, Netanyahu refrained from declaring Turkish-Israeli reconciliation dead, but accused Erdogan of anti-Semitism more aligned with Tehran then the West.

These heightened Israeli-Turkish tensions come just as the two countries were negotiating a compensation deal for families of victims of the May 31, 2010 Mavi Marmara incident. The deal was intended to facilitate a long-awaited normalization between the two countries, more than a year after Israel’s official apology. The draft stipulated an estimated $21 million in Israeli compensation, the reinstatement of each country’s ambassador, and the reestablishment of a senior-level bilateral dialogue. However, a series of issues has prevented the deal’s finalization, including: Turkish domestic political considerations about the timing (related to March 2014 municipal elections and August 2014 presidential elections) and Israeli demands for Turkish commitments to block future lawsuits related to the Marmara incident.

With the ongoing Gaza conflict, prospects for normalization have again faded at least in the short term, and policymakers on both sides seem to have accepted a limited relationship. Erdogan even declared publicly that as long as he’s in power, there is no chance “to have any positive engagement with Israel”, dismissing any prospect for normalization. Israeli-Turkish animosity runs deep, not only among leaders, but at the grassroots level as well. While it may be difficult to look beyond the short term, a focus on the broader regional picture suggests four reasons why the two countries would benefit from restoring ties.

• First, they share strategic interests. Turkey and Israel see eye to eye on many issues: preventing a nuclear Iran; concerns over spillover from the Syrian civil war; and finally, the rise of the Islamic State of Iraq and the Levant (ISIS/ISIL) and security and stability in Iraq. A resumed dialogue and renewed intelligence sharing can pave the way for more concrete cooperation between Turkey and Israel on all these regional issues, with development of a joint approach toward Syria topping the agenda.
• Second, regional environment may be beyond their control, the bilateral relationship is not. Normalization can eliminate one factor of instability in an unstable region.
• Third, Washington sees greater cooperation and cohesiveness in the U.S.-Turkey-Israel triangle as essential. President Obama has sought to restore a dialogue between Ankara and Jerusalem, including efforts to “extract” an Israeli apology and Turkish acceptance. Senior U.S. officials remain active in trying to improve the Turkish-Israeli relationship.
• Fourth, normalization may convey benefits in the economic sphere, with possible cooperation on natural gas, tourism, and enhanced trade. Gas in particular is viewed as a possible game-changer. In 2013, bilateral trade first crossed the $5 billion mark, and data from the first six months of 2014 indicates a continued rise. A political thaw can help accelerate these joint business opportunities. 

Nevertheless, at this stage it is clear that serious U.S. involvement is required for Turkish-Israeli rapprochement to succeed, even in a limited fashion. At present, there are far greater challenges for U.S. foreign policy in the region. The question now is whether the relationship between two of America’s closest regional allies reflects a new “normal,” or whether the leaders of both countries – and the U.S. – can also muster the political will to reconnect the US-Turkey-Israel triangle along more productive lines.

Check back to Brookings.edu for Dan Arbell’s upcoming analysis paper: The U.S.-Turkey-Israel Triangle.