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President Barack Obama took office in early 2009 with an ambitious foreign policy agenda for the Americas. In April of that year, his keynote remarks at the fifth Summit of the Americas emphasized the United States’ new course of seeking equal partnership and collaboration in the region.

On June 29, the Latin America Initiative at Brookings and the Corporación Andina de Fomento (CAF) brought together experts from the region to discuss the significance of this renewed hemispheric partnership and featured a keynote address from Arturo Valenzuela, assistant secretary of state for Western Hemisphere affairs. Panelists included: Craig Kelly, principal deputy assistant secretary for Western Hemisphere Affairs at the U.S. Department of State; Michael Shifter, president of the Inter-American Dialogue; Luis Enrique Berrizbeitia, executive vice-president of the Corporación Andina de Fomento (CAF); and Kevin Casas-Zamora, senior fellow at Brookings. They took a closer look at the idea of partnership in the region, reviewed the progress that has been made, explored opportunities that exist for the future and discussed the realities of developing collaborative policies in the region across a wide range of topics, including energy and climate change. The discussion also revisited the policy recommendations made by Brookings‘s Partnership for the Americas Commission.

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• A Confident and Strong Latin America
• Adaptable Latin America Policy
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• Latin America and the Obama Administration: A New Partnership?

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• Transcript (.pdf)

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• 20100629_americas_partnership

Introduction

President Obama has proposed expanding the Peace Corps and building a global network of volunteers, “so that Americans work side-by-side with volunteers from other countries.” Achieving this goal will require building on the success of the Peace Corps with a new combination of public and private initiatives designed to expand opportunities for volunteers to address critical global problems such as poverty, contagious diseases, climate change, and conflict.

We examine alternative service models, both domestic and foreign, and offer recommendations to the Obama Administration for harnessing the energy and skills of Americans eager to engage in volunteer work in foreign countries as part of a multilateral mobilization effort and smart power diplomacy.

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President Obama’s speech at West Point, outlining the way forward on Afghanistan and Pakistan, was followed three days later by two important events underscoring the president’s view that “our security and leadership does not come solely from the strength of our arms.” He conveyed a new smart power view of security that “derives from our people [including] … Peace Corps volunteers who spread hope abroad, and from the men and women in uniform who are part of an unbroken line of sacrifice …”

On December 4, General Anthony Zinni, USMC (Ret.), former commander-in-chief of U.S. Central Command (CENTCOM), addressed an audience celebrating the tenth anniversary of the International Center for Religion and Diplomacy (ICRD). He pointedly noted that hard power alone cannot fight terrorism; economic and social factors of terrorist populations should be addressed. He further noted that empowering faith-based approaches “is a tremendous asset to inform the ways we mediate and find common ground … to figure out what the other side of smart power means.”

Recognizing that educational reform is critical, ICRD to date has empowered about 2,300 Pakistani madrassas administrators and teachers with enhanced pedagogical skills promoting critical thinking among students, along with conflict resolution through interfaith understanding. Evidence of success is mounting as the program fosters local ownership reasserting Islam’s fundamental teachings of peace and historical contributions to the sciences and institutions of higher learning—a rich history that was misappropriated by extremists who took over a significant number of madrassas using rote learning laced with messages of hate.

Earlier the same day, President Obama’s newly minted Peace Corps Director Aaron Williams, himself a former Dominican Republic Peace Corps volunteer, received high marks from former Senator Harris Wofford—a JFK-era architect of the Peace Corps—and hundreds of NGOs and volunteer leaders at the “International Volunteer Day Symposium.”

Director Williams has embraced a new “global service 2.0” style leadership committed to championing Peace Corps volunteers alongside a growing corps of NGO, faith-based, new social media and corporate service initiatives. Wofford, who co-chairs the Building Bridges Coalition team with former White House Freedom Corps Director John Bridgeland, spoke about the present moment as a time to “crack the atom of citizen people power through service.”

The notion of a “smart power surge” through accelerated deployment of people power through international service, interfaith engagement, and citizen diplomacy should be quickly marshaled at a heightened level to augment the commander-in-chief’s hard power projection strategies outlined at West Point. 

According to successive Terror Free Tomorrow polling, such strategies of service and humanitarian engagement by the United States have been achieving sustainable results in reducing support for terrorism following the tsunami and other disasters from Indonesia to Pakistan and Bangladesh. Lawmakers should take note of these findings, along with the evidence-based success of Johnston’s ICRD Madrassas project (which, inexplicably, has not received federal support to date, in spite of its evidence of marked success in giving Pakistani children and religious figures critical tools that are urgently need to be scaled up across the country to wage peace through enlightened madrassas education and interfaith tolerance).

A growing coalition of now over 400 national organizations is amassing a “Service World” platform for 2010. They have taken a page out of the incredibly successful Service Nation platform, which Barack Obama and John McCain both endorsed, creating a “quantum leap” in domestic service through fast track passage of the Kennedy Serve America Act signed into law by the president last spring. Organizers hope to repeat this quantum leap on the international level through a “Sargent Shriver Serve the World Act,” and through private-sector partnerships and administration initiatives adapting social innovation to empower service corps tackling issues like malaria, clean water, education and peace.  

With the ICRD Pakistan success, a rebounding Peace Corps and the Building Bridges Coalition’s rapid growth of cross-cultural solutions being evaluated by Washington University, the pathway to “the other side of smart power” through service, understanding and acceptance, is being vividly opened.

A Brookings Global Views paper further outlines how multilateral collaboration can be leveraged with other nations in this emerging “global force for good.” It is a good time to reflect on all this as we approach the upcoming 50th anniversary of the Peace Corps next year in Ann Arbor, where on October 14, 1960 President John F. Kennedy inspired students to mount a new global service.  

President Obama’s call to global engagement in Cairo in June, which ignited the announcement of Service World later that same morning, now demands a response from every citizen who dares to live up to JFK’s exhortation to “ask not what your country can do for you—ask what you can do for your country,” along with our young men and women preparing for engagement at West Point.  

David Caprara, a Brookings nonresident fellow and expert on volunteering, says that John F. Kennedy’s call to service a half-century ago led to the founding of dozens of international aid organizations, and leaves a legacy of programs aimed at improving health, nutrition, education, living standards and peaceful cooperation around the globe.

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Robert Sargent Shriver, Jr. guided the Peace Corps from its inception in 1961 (when it was a nascent vision of service and citizen diplomacy) to establish a renowned track record of success over the past half century, in which more than 200,000 volunteers and trainees have served in 139 countries.

The legacy of Shriver’s leadership with the Peace Corps and later with the Office on Economic Opportunity and Special Olympics has reached and changed millions of lives—of both those empowered and those who served—from impoverished communities across rural and urban America to huts and villages in developing nations throughout the world. Yet one of the greatest gifts he leaves us is the foundation to build on those accomplishments to scale-up service as a direly needed “soft power” alternative to establish international understanding and collaboration in a volatile world. As Sarge put it, so simply but powerfully: “Caring for others is the practice of peace.”

Sarge Shriver’s unquenchable idealism today is being advanced by a new generation of social entrepreneurs such as Dr. Ed O’Neil, founder of OmniMed and chair of the Brookings International Volunteering Project health service policy group. With the help of Peace Corps volunteers and USAID-supported Volunteers for Prosperity, O’Neil has fielded an impressive service initiative in Ugandan villages that has expanded the capacity and reach of local health-service volunteers engaged in malaria prevention and education on basic hygiene. 

Timothy Shriver, who succeeded his parents, Sarge and Eunice, at the helm of the Special Olympics, speaks eloquently on the move of a second generation from politics to building civil society coalitions promoting soft power acts of service and love, one at a time. This impulse is echoed in the Service World policy platform which hundreds of NGOs and faith-based groups, corporations and universities have launched to scale-up the impact of international service initiatives. This ambitious undertaking was first announced by longtime Shriver protégé former Senator Harris Wofford at a Service Nation forum convened on the morning of President Obama’s Cairo speech in which he called for a new wave of global service and interfaith initiatives.

I had the privilege of serving as a national director of the VISTA program inspired by Shriver and  to work alongside Senator Wofford and John Bridgeland, President George W. Bush’s  former White House Freedom Corps director, who have co-chaired the Brookings International Volunteering Project policy team. Along with Tim Shriver, they have ignited the Service World call to action, together with Michelle Nunn of Points of Light Institute, Steve Rosenthal of the Building Bridges Coalition, Kevin Quigley of the National Peace Corps Association and many others.

The Obama administration and Congress would best honor the life and legacy of Sarge Shriver by calling for congressional hearings and fast- tracking agency actions outlined in the Service World platform and naming the global service legislation after him. Coupled with innovative private-sector and federal agency innovations, the legislation would authorize Global Service Fellowships, link volunteer capacity-building to USAID development programs such as  Volunteers for Prosperity, and double the Peace Corps to reach a combined goal of 100,000 global service volunteers annually—a goal first declared by JFK.

Those who promote opportunity and service as vehicles to advance peace and international collaboration will continue to draw inspiration from Sargent Shriver’s indefatigable quest for social justice―from the time he talked then-Senator John F. Kennedy into intervening in the unjust jailing of Martin Luther King, Jr. to his refusal to accept wanton violence and impoverished conditions in any corner of the world.

Information on offering online tributes to the Shriver family and donations in lieu of flowers requested by the family of Sargent Shriver can be found at www.sargentshriver.org .

Last October, 200 students from Colombia's Servicio Nacional de Aprendizaje (SENA) worked the floor of the campus coliseum at Universidad del Norte in Barranquilla. They were among 900 youth volunteer leaders from nearly 40 nations who had traveled the globe to join the second World Summit for Youth Volunteering, convened by Partners of the Americas and the International Association for Volunteer Effort (IAVE) on the 10th anniversary of the United Nations International Year of Volunteers.

As a developing country, Colombia’s increased civil society participation through volunteering is focused on extending poverty-reduction efforts to levels that the government cannot achieve on its own. Volunteers represent a powerful demographic for a new "service generation" by providing a dual benefit. First, volunteering provides critical services in areas such as education and asset development, which are needed to reduce extreme poverty; second, it connects a new generation with like-minded individuals across the world, which provides young people the professional and leadership skills needed to further access to employment opportunities including entrepreneurship.

For SENA, one of the world's largest educational institutions with more than four million students across Colombia, the opportunity was clear: engage talented and often under resourced youth in Colombia — one of the most economically unequal countries in the world– with innovative global volunteer leaders. According to research from Brookings and the Center for Social Development at Washington University, these types of global volunteering connections have the potential to enhance skills development while increasing social capital networks.

Extreme poverty, along with armed conflict, is one of the highest priorities of the Colombian government. Coincidentally, during the same week as the World Summit, the Colombian armed forces eliminated the Revolutionary Armed Forces of Colombia (FARC) leader Alfonso Cano while President Santos created a new national superagency to combat extreme poverty. The strategic focus on poverty reduction includes a strong role for civil society as a partner with the government in meeting the U.N. Millennium Development Goals and other development commitments. Civil society plays an essential role in overcoming internal conflict. And the youth services generation is among some of the most effective in civil society in working to help their country tackle poverty.

Colombia is certainly not the only country where youth have taken the lead through service to combat poverty. Attendees at the summit heard from Australian humanitarian Hugh Evans, who at 14 began his work to create the Global Poverty Project. In 2006, Evans became one of the pivotal leaders behind the successful Make Poverty History campaign, leading a team across Australia to lobby the country’s government to increase its foreign aid commitment to 0.7 percent of gross national income.

Whether or not SENA’s youth will be able to capitalize on their new connections with global service leaders to combat extreme poverty in Colombia is left to be seen. But the SENA volunteers and their international counterparts are more motivated to do so after gaining access to resources and social capital networks with other inspiring young leaders. That is a cause for celebration as the United Nations releases its State of the World Volunteering report in New York in December at a special session of the U.N. General Assembly.

INTRODUCTION

Over the past decade, the focused attention of African nations, the United States, U.N. agencies and other multilateral partners has brought significant progress toward achievement of the Millennium Development Goals (MDGs) in health and malaria control and elimination. The potential contribution of these strategies to long-term peace-building objectives and overall regional prosperity is of paramount significance in sub-regions such as the Horn of Africa and Western Africa that are facing the challenges of malaria and other health crises compounded by identity-based conflicts.

National campaigns to address health Millennium Development Goals through cross-ethnic campaigns tackling basic hygiene and malaria have proven effective in reducing child infant mortality while also contributing to comprehensive efforts to overcome health disparities and achieve higher levels of societal well-being.

There is also growing if nascent research to suggest that health and other humanitarian interventions can result in additional benefits to both recipients and donors alike.

The social, economic and political fault lines of conflicts, according to a new study, are most pronounced in Africa within nations (as opposed to international conflicts). Addressing issues of disparate resource allocations in areas such as health could be a primary factor in mitigating such intra-national conflicts. However, to date there has been insufficient research on and policy attention to the potential for wedding proven life-saving health solutions such as malaria intervention to conflict mitigation or other non-health benefits.

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Suzy Khimm reports on a proposal from the Bipartisan Policy Center that would establish a framework for reaching a grand bargain on deficit reduction in 2013. In short, the BPC proposes that Congress and the president in the lame duck session would agree to a procedural framework for guiding enactment of major spending and tax reforms in 2013. In enacting the framework, Congress and the president would also avert going over the fiscal cliff. In exchange, Congress and the president would make a small down payment on deficit reduction in the lame duck, and would authorize a legislative “backstop” of entitlement cuts and elimination of tax expenditures that would become law if Congress and the president failed in 2013 to enact tax and spending reforms.

The procedural elements of the BPC’s proposal bear some attention. The BPC’s not-quite-yet-a-catchphrase is “accelerated regular order.” Although it sounds like a nasty procedural disease, it’s akin to the fast-track procedures established in the Congressional Budget Act and in several other statutes. In short, the framework proposed by the BPC would instruct the relevant standing committees in 2013 to suggest to the chamber budget committees entitlement and tax reforms that would sum to $4 trillion dollars in spending cuts and new revenues (assuming extension of the Bush tax cuts). The House and Senate budget panels would each report a grand bargain bill for their chamber’s consideration that would be considered (without amendment) by simple majority vote after twenty hours of debate. Failure to meet the framework’s legislated deadlines would empower the executive branch to impose entitlement savings and to eliminate tax expenditures to meet the framework’s target.

Loyal Monkey Cage readers will recognize that the BPC proposal resembles in many ways the procedural solution adopted in the Deficit Control Act in August of 2011. But there are at least two procedural differences from the 2011 deficit deal. First, rather than a super committee, the BPC envisions “regular order,” meaning that the standing committees—not a special panel hand-selected by party-leaders—would devise the legislative package. Like the August deficit deal, the BPC proposal then offers procedural protection for the package by banning the Senate filibuster and preventing changes on the chamber floors (hence, an accelerated regular order). Second, rather than a meat-axe of sequestration that imposes only spending cuts, the BPC offers a “backstop,” giving what I take to be statutory authority to the executive branch to determine which tax expenditures to eliminate and which entitlement programs to cut back.

These differences from 2011 are subtle, but the BPC believes that they would improve the odds of success compared to the failed Super-committee plus sequestration plan. As a BPC staffer noted:

"One of the reasons the Joint Select Committee on Deficit Reduction failed, in our view, was because only 12 lawmakers were setting policy for the entire Congress,” said Steve Bell, Senior Director of BPC’s Economic Policy Project. “The framework we propose today would both ensure an acceleration of regular budget order in the House and Senate, and it would involve all committees of relevant jurisdiction.”

This is an interesting argument worth considering. Still, I’m not so sure that accelerated regular order would improve the prospects for an agreement.

First, it strikes me that the real barrier to a grand bargain hasn’t been the Senate’s filibuster rule. The super committee was guaranteed a fast-track to passage, but that still didn’t motivate the parties to reach an agreement. The more relevant obstacle in 2011 and 2012 has been the bicameral chasm between a Republican House and a Democratic Senate. To be sure, eliminating the need for a sixty-vote cloture margin would smooth the way towards Senate passage. But we could easily imagine that the 60th senator (in 2013, perhaps a GOP senator like Lisa Murkowski) might be willing to sign onto a deal that would still be too moderate to secure the votes of House Republicans (assuming no change in party control of the two chambers). As we saw over the course of the 112th Congress, House passage required more than the consent of the House median (an ideologically moderate Republican) and more than the support of a majority of the GOP conference. The big deals in the 112th Congress only passed if they could attract the votes of roughly 90% of the House GOP conference. Expedited procedures can protect hard-fought compromises from being unraveled on the chamber floors but by themselves don’t seem sufficient to generate compromise in the first place.

Second, and related, I’m somewhat skeptical that the small size of the super committee precluded a viable agreement. By balancing parties and chambers, the group was (in theory) a microcosm of the full Congress. If true, then delegating to the super committee was more akin to delegating to a mini-Congress. Perhaps the BPC’s idea of allowing the standing committees to generate proposals would broaden legislators’ willingness to buy-in to a final agreement. More likely, I suspect that the framework would produce a House bill perched on the right and a Senate bill left of center (since the filibuster ban would reduce Democrats’ incentives to produce a bipartisan bill). That leaves the bicameral chasm still to be bridged, suggesting that accelerated regular order might not bring Congress all that much closer to a bipartisan agreement in 2013. Consent of party leaders remains critical for an agreement.

Third, the BPC proposal is unclear on the precise nature of the legislative backstop. But would either party agree in advance to the framework if they didn’t know whose ox would be gored by the administration when it exercised its power to reform entitlements and eliminate tax expenditures? Perhaps delegating such authority to the executive branch would allow legislators to avoid voters’ blame, making them more likely to vote for the framework. (That said, it’s somewhat ironic that the BPC’s embrace of accelerated regular order flows from its desire to broaden the set of legislators whose fingerprints are visible on the grand bargain.) Regardless, the prospects for cuts in entitlement programs could lead both parties to favor kicking the can down the road again before it actually explodes.

Fast-track procedures have a decent track record in facilitating congressional action. (Steve Smith and I have extolled their virtues elsewhere.) But the most successful of these episodes involve narrow policy areas (such as closing obsolete military bases) on which substantial bipartisan agreement on a preferred policy outcome is already in place. Expecting a procedural device to do the hard work of securing bipartisan agreement may be asking too much of Congress’s procedural tool kit in a period of divided and split party control.

It seems the Senate could have a really hot summer. Majority leader Harry Reid (D-NV) has reportedly threatened to “go nuclear” this July—meaning that Senate Democrats would move by majority vote to ban filibusters of executive and judicial branch nominees. According to these reports, if Senate Republicans block three key nominations (Richard Cordray to head the Consumer Financial Protection Bureau, Thomas Perez at Labor, and Gina McCarthy at EPA), Reid will call on the Democrats to invoke the nuclear option as a means of eliminating filibusters over nominees.

Jon Bernstein offered a thoughtful reaction to Reid’s gambit, noting that Reid’s challenge is to “find a way to ratchet up the threat of reform in order to push Republicans as far away from that line as possible.” Jon’s emphasis on Reid’s threat is important (and is worth reading in full).  Still, I think it’s helpful to dig a little deeper on the role of both majority and minority party threats that arise over the nuclear option.

Before getting to Reid’s threat, two brief detours. First, a parliamentary detour to make plain two reasons why Reid’s procedural gambit is deemed “nuclear.” First, Democrats envision using a set of parliamentary moves that would allow the Senate to cut off debate on nominations by majority vote (rather than by sixty votes). Republicans (at least when they are in the minority) call this “changing the rules by breaking the rules,” because Senate rules formally require a 2/3rds vote to break a filibuster of a measure to change Senate rules. The nuclear option would avoid the formal process of securing a 2/3rds vote to cut off debate; instead, the Senate would set a new precedent by simple majority vote to exempt nominations from the reach of Rule 22. If Democrats circumvent formal rules, Republicans would deem the move nuclear. Second, Reid’s potential gambit would be considered nuclear because of the anticipated GOP reaction: As Sen. Schumer argued in 2005 when the GOP tried to go nuclear over judges, minority party senators would “blow up every bridge in sight.” The nuclear option is so-called on account of the minority’s anticipated parliamentary reaction (which would ramp up obstruction on everything else).

A second detour notes simply that the exact procedural steps that would have to be taken to set a new precedent to exempt nominations from Rule 22 have not yet been precisely spelled out.  Over the years, several scenarios have been floated that give us a general outline of how the Senate could reform its cloture rule by majority vote. But a CRS report written in the heat of the failed GOP effort to go nuclear in 2005 points to the complications and uncertainties entailed in using a reform-by-ruling strategy to empower simple majorities to cut off debate on nominations. My sense is that using a nuclear option to restrict the reach of Rule 22 might not be as straight forward as many assume.

That gets us to the place of threats in reform-by-ruling strategies. The coverage of Reid’s intentions last week emphasized the importance of Reid’s threat to Republicans: Dare to cross the line by filibustering three particular executive branch nominees, and Democrats will go nuclear. But for Reid’s threat to be effective in convincing GOP senators to back down on these nominees, Republicans have to deem Reid’s threat credible. Republicans know that Reid refused by go nuclear last winter (and previously in January 2009), not least because a set of longer-serving Democrats opposed the strategy earlier this year. It would be reasonable for the GOP today to question whether Reid has 51 Democrats willing to ban judicial and executive branch nomination filibusters. If Republicans doubt Reid’s ability to detonate a nuclear device, then the threat won’t be much help in getting the GOP to back down. Of course, if Republicans don’t block all three nominees, observers will likely interpret the GOP’s behavior as a rational response to Reid’s threat. Eric Schickler and Greg Wawro in Filibuster suggest that the absence of reform on such occasions demonstrates that the nuclear option can “tame the minority.”  Reid’s threat would have done the trick.

As a potentially nuclear Senate summer approaches, I would keep handy an alternative interpretation.  Reid isn’t the only actor with a threat: given Republicans’ aggressive use of Rule 22, Republicans can credibly threaten to retaliate procedurally if the Democrats go nuclear.  And that might be a far more credible threat than Reid’s. We know from the report on Reid’s nuclear thinking that “senior Democratic Senators have privately expressed worry to the Majority Leader that revisiting the rules could imperil the immigration push, and have asked him to delay it until after immigration reform is done (or is killed).” That tidbit suggests that Democrats consider the GOP threat to retaliate as a near certainty. In other words, if Republicans decide not to block all three nominees and Democrats don’t go nuclear, we might reasonably conclude that the minority’s threat to retaliate was pivotal to the outcome. As Steve Smith, Tony Madonna and I argued some time ago, the nuclear option might be technically feasible but not necessarily politically feasible.

To be sure, it’s hard to arbitrate between these two competing mechanisms that might underlie Senate politics this summer.  In either scenario—the majority tames the minority or the minority scares the bejeezus out of the majority—the same outcome ensues: Nothing. Still, I think it’s important to keep these alternative interpretations at hand as Democrats call up these and other nominations this spring. The Senate is a tough nut to crack, not least when challenges to supermajority rule are in play.

Sen. Harry Reid has gone ahead with the so-called "nuclear option" to attempt to change Senate filibuster rules on some executive branch nominations, passing the rule change with a 52-48 vote. In their Vital Statistics on Congress report, Brookings Senior Fellow Thomas Mann and AEI Resident Scholar Norman Ornstein provide data on the number of attempted Senate cloture votes taken from 1979 to 2012, the 96th to 112th Congresses. The chart below demonstrates the average attempted cloture vote taken by party when that party was in the minority.

For more data on both attempted and successful cloture votes sine 1919, look up table 6-7 in Vital Stats (PDF).

Senior Fellow Sarah Binder, a leading expert on Congress and congressional history who called, in 2010, the Senate filibuster a "mistake," offered a recent analysis of Senate cloture votes, writing that "Counting cloture votes remains an imperfect — but still valid — method of capturing minority efforts to block the Senate."

More recently, Binder wondered whether "Democrats have the guts to go there and, if so, whether that compels any Republicans to stand down."

HHS Secretary Kathleen Sebelius may lose the most from the Senate’s rule change on the filibuster—and the Affordable Care Act may be healthier for it. I wrote last month on the FixGov blog that “Republicans are the Reason Secretary Sebelius Won’t Resign” (or be fired). That argument is no longer valid. My claim—the president’s inability to get her successor confirmed because of filibustering Republicans—is nullified by the Senate’s rule change, and the benefits may reach far beyond Obamacare.

The Implications of Filibuster Reform for Healthcare

Problems exist in HHS. No one denies it. However, for many appointees in the Department, the Senate rules served as a life preserver in a torrent of poor implementation, managerial failures, and bad PR. So long as the president faced the prospect of long-term vacancies among appointees overseeing ACA, the HHS leadership would be spared.

Today, that all changed. Moving forward, President Obama needs the support of only 51 Senate Democrats to replace top-level political appointees throughout the executive branch. This offers the president substantial breathing room. Nominees no longer need the support of every Democrat and a scarcely identifiable five Republicans. Instead, nominees can draw the ire of as many as four Democrats and still be confirmed.

Maybe Kathleen Sebelius is not to blame for the botched healthcare marketplace roll out. Maybe her Office did not give the thumbs up for the President to repeat “if you like your plan you can keep it.” Maybe she did not contribute to the poor salesmanship of the legislation from the start. However, if she was to blame (and perhaps if she wasn’t), her days in the president’s cabinet may well be numbered. The same may be true for deputies and other administrators in the Department who oversaw the weaker areas of the roll out of this law.

By repositioning HHS personnel or breathing new life into a Department facing continued struggles, the president may well ensure the administration of his signature legislation accomplishment improves. The right appointees can coordinate and communicate policy needs and goals up and down the bureaucratic hierarchy. Rather than settling for a program that meets or falls short of expectations, there is an opportunity to build an effective ACA.

Good Governance beyond Obamacare

The first half of October showed us that political actors in Congress contributed to a broken legislative branch. The second half of October showed us that political actors in the Administration contributed to a broken executive branch. Now is the time for the president to start anew and fix one branch, in the shadow of a Senate trying to fix itself.

In my piece from last month, I also argued that the filibuster rules in the Senate allow for the continuation of poor management and governance. If weak appointed personnel are causing policy problems, communication miscues, and other headaches for the president, the ability to replace them with something other than the word “ACTING” was limited by the 60-vote threshold.

President Obama, who has faced a string of personnel and management issues over the past year, now has greater freedom not simply to oust problematic appointees, but to install talented, effective leaders. With this ability comes a tremendous opportunity to jumpstart an administration that is sputtering.

The July 4th congressional recess’s pause in 2014’s record pace of judicial confirmations is a good time to explore the reason for the upsurge.

The 54 confirmations at 2014’s half-way point compare to 43 in all of 2013. What’s behind the increase? Some have said that the Senate’s November 2013 rules change—to allow a simple majority to end filibusters on most nominees—“has resulted in [the] sharp increase.” There is a lot of appeal (and even a little truth) to the claim, but beware the “post hoc ergo propter hoc” fallacy that if “B” follows “A”, “A” necessarily caused “B”.

There have been 61 confirmations since November 21. The rules change clearly enabled three of them. Late October and mid-November filibusters of three D.C. circuit appellate nominees were the immediate cause of the change, which in turn allowed their post-November confirmations.

Saying how many of the other post-November confirmations would have failed without the rules change is an exercise in informed speculation. Here’s one way to look at it: how many of those confirmations had enough negative votes to have sustained a filibuster under the old rule?

Invoking cloture—i.e., cutting off debate—under the old rule required 60 votes. Filibuster proponents were often able to prevent that by peeling off, if not 41 Nay votes, at least votes in the 30s, assuming not all 100 senators were present to vote. For this analysis, let’s set the bar at 34—the fewest number of votes that prevented a 60 vote cloture-invocation against any Obama nominee (most filibuster-sustaining votes were in the high 30’s and low 40’s).

Forty five of the 51 post-November district confirmations quite probably would have happened without the rules change. They had fewer than 34 Nays. And it’s hardly automatic that the six with at least 34 Nays would have been filibustered under the old rule. Senators can and do oppose a nominee but oppose filibustering her as well. Prior to the rules change, 12 district judges were confirmed even though they had at least 34 Nays. Only one of those needed a cloture vote to move to confirmation—33 voted against cloture and 44 voted against confirmation. (Cloture votes, a rarity before the rules change, have been routine since then, and they generally get around 30-40 negative notes. But these appear to be protest votes against the rules change, inasmuch as 27 of the 51 district confirmation had no Nays and another 14 had 20 or fewer Nays.)

So it’s reasonable speculation, but still speculation, that the rules change had no direct effect on district confirmations.

Circuit confirmations are a different story. The three D.C. nominees clearly owe their confirmations to the rules change. Three of the seven other circuit confirmations since November had well over 34 Nays (40, 43, and 45, in fact). One nominee had represented challengers to California’s since-overturned same-sex marriage ban; another, also a Californian, was nominated to a long-vacant seat that Republican senators claimed belonged in Idaho. The third, with 45 Nays, had authored Justice Department memos providing legal justifications for drone strikes against U.S. citizens. Successful filibusters against all three, under the old rule, seem quite plausible. (The other four post-rules-change nominees were confirmed with either no, or in one case, three negative votes.)

Bottom line: The rules change likely enabled at most twelve of the 61 post-rules change confirmations, and it more likely enabled only six.

The frenetic pace of 2014 confirmations is due mainly to Senate Democrats’ desire to secure as many as they can before the November elections and the possibility of losing control of the confirmation process.

Jennifer S. Vey, a fellow with the Centennial Scholar Initiative, discusses the current economic, social, and political situation in Baltimore a year after the riots.

“1/5 people in Baltimore lives in a neighborhood of extreme poverty, and yet these communities are located in a relatively affluent metro area, in a city with many vibrant and growing neighborhoods,” Vey says. In this podcast, Vey describes the current state of Baltimore and urges the start of discussions about the abject poverty facing many cities in the United States.

Also in this episode: stay tuned for our presidential election update with John Hudak. Also, Vanda Felbab-Brown discusses global drug policy and the upcoming United Nations General Assembly special session on drug policy.

Show Notes

"The Third Rail"

One year after: Observations on the rise of innovation districts

Confronting Suburban Poverty in America

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Amy Liu’s recent paper, “Remaking Economic Development,” is disruptive in that it rightfully undercuts the shaky foundation of what draws many practitioners to the field: the idea that success is simply structuring transactions to attract new jobs and investment. These two metrics alone can’t diagnose the economic health or trajectory of a community. Instead, as the paper outlines, setting the right goals—measured by growth, prosperity, and inclusion—provides a much richer framework for a community’s trajectory, vibrancy, and opportunity.

Goal-setting clarifies how a community defines success and when it has been achieved, and promotes collaboration and increases buy-in from diverse stakeholders. If, as Liu argues, goals were designed to lead to growth, prosperity, and inclusion, metro areas would make dramatically different choices around policies, investments, and priorities, and people and communities would likely be in an overall stronger economic position.

However, these goals represent a longer-term proposition than conventional measures, and, perhaps naively, “Remaking Economic Development” fails to acknowledge the barriers that prevent most communities from setting the right goals:

1. Goals should focus on long-term interests, but election cycles prioritize clear near-term political wins. Meaty investments in infrastructure, workforce development, and fiscal policy reform needed to shift the competitive position of a community rarely yield easily defined and clearly increased short-term political capital.
2. Economies function as regions, but many municipal strategies are not aligned with regional goals. A metropolitan area is the logical unit to measure success, but civic leaders are elected from individual municipalities, or from a state that has a larger focus. Although it’s easier to market a region of 5 million people than a city of 650,000, in Detroit, intramural competition between cities and suburbs, suburbs and suburbs, and even neighborhoods within the city all undermine the cooperative effort to set goals regionally. The failure of mayors within a region to recognize their economic connectedness is a huge problem and fuels wasteful incentive battles over retail and other projects that are not economic drivers.
3. Goal-setting takes time, money, and requires data, but capacity is in short supply. Most economic developers and political leaders lack the framework, experience, and manpower to effectively lead a goal-setting process. And if the choice is between collectively setting goals or managing a flurry of “bird-in-hand” transactions, the transaction under consideration will always receive resources first. Leaders are primarily evaluated on near term jobs and investment figures; not having the time to lead a goal-setting process and, in many cases, lacking the approach and datasets to appropriately undertake this activity make goal-setting easy to eliminate.

Despite these obstacles, setting the right goals is critical to building healthy communities. To combat political challenges, strong collaboration between business and public sector leadership is crucial, as is the recognition of diverse sub-economies with different value propositions and opportunities. Leaders must ultimately acknowledge that near term wins mean little if they are leading down a path that will not fundamentally address the long-term investment climate and the region’s productive capacities, grow wages or address employment levels, and offer broad opportunities for diverse economic participation. The following steps can help:

1. Harness diverse, cross-sectoral perspectives. Fundamentally, businesses understand their industries better than anyone else; hence the public sector should identify ways to encourage growth, increased productivity, greater inclusion, and more competitiveness in targeted sectors by listening to businesses and jointly setting goals that marry private sector profit and public economic and social interests effectively. This approach may offset some of the other realities of short election cycles and limited capacity to participate in goal-setting or planning processes.
2. Identify unique roles for communities within a larger regional framework. Although competition between local cities may inhibit the most meaningful dialogue and alignment of interests, deeper analysis often produces greater clarity on the niche opportunities for different communities. For example, although Detroit has a strong manufacturing base, a major project requiring more than 40 acres will likely have better site options in the suburbs. In the same vein, companies seeking a vibrant urban campus with easy access to food, living, and other amenities are likely better suited to Detroit than one of the surrounding communities. That said, both companies are likely to draw employees from communities all over the region. Effective goal-setting includes analysis that should allow municipalities to uncover their niche opportunities within a larger regional framework.
3. Balance short-term and long-term priorities and successes. The truth is that near term investments are vital in creating momentum, providing stability, and creating jobs while long-term investments, policy decisions, and industry-focused asset development fundamentally position an economy to win over time. For example, incentives play an important role in offsetting competitive disadvantages in the short-term and should be used as a way to fill the gap while a community fixes the bigger economic challenges, ranging from exorbitant development costs to workforce development issues. The disconnect is that many communities are not focusing incentives on strategic, long-term priorities.

"Remaking Economic Development” elegantly exposes the shortsightedness toward aggressive deal-making that often prevents communities from thoughtfully building their long-term economic strength with an eye on growth, prosperity, and inclusion. Sadly, the economic development profession has historically focused on growth without much attention to prosperity and inclusion, which are arguably most important in building a sustainable economy. Goal-setting—painful as it may be—is the first step towards remaking the practice and establishing an honest foundation to build a better economy in the future.

Event Information

Having emerged from the largest municipal bankruptcy in American history, Detroit is now on surer financial footing and experiencing an economic resurgence. Due much in part to an unprecedented collaboration among philanthropy, business, and government, Detroit is benefiting from private and public sector investments downtown and across its neighborhoods. Today, there are revived neighborhoods, new businesses, a downtown innovation district, the M-1 RAIL transit corridor, and a spirit of creativity and entrepreneurialism.

On Tuesday, April 26, the Metropolitan Policy Program at the Brookings Institution hosted an event about Detroit’s rebound. Brookings Vice President of Metropolitan Policy Amy Liu opened the program and introduced Kresge Foundation President Rip Rapson, who presented findings from The Detroit Reinvestment Index, forthcoming research on what national business leaders think about the city. Rapson then moderated a panel of experts who discussed accomplishments to date and the work yet to come in furthering Detroit’s revitalization.

Join the conversation on Twitter at #DetroitResurgence

Photos

Amy Liu opens the program

Rip Rapson gives remarks

Sandy Baruah, President and Chief Executive Officer, Detroit Regional Chamber; Stephen Henderson, Editorial Page Editor, The Detroit Free Press; Quintin E. Primo III, Co-Founder, Chairman and Chief Executive Officer, Capri Investment Group, LLC ; Jennifer Vey, Fellow & Co-Director, Robert and Anne Bass Initiative on Innovation and Placemaking, The Brookings Institution

Video

• Welcome and Presentation
• Panel

Audio

• How philanthropy, business, and government sparked Detroit’s resurgence

Announcements of new federal regulations on the use of program-related investments (PRIs) and the launch of a groundbreaking fund in Chicago are the latest signals that impact investing, once a marginal philanthropic and policy tool, is moving into the mainstream. They are also illustrative of two important and complementary paths to institutional change: fast-moving, collaborative local leadership creating innovative new instruments to meet funding demands; federal regulators updating policy to pave the way for change at scale.

Impact investing, referring to “investment strategies that generate financial returns while intentionally improving social and environmental conditions,” provides an important tier of higher-risk capital to fund socially beneficial projects with revenue-generating potential: affordable housing, early childhood and workforce development programs, and social enterprises. It is estimated that there are over $60 billion of impact investments globally and interest is growing—an annual JP Morgan study of impact investors from 2015 reports that the number of impact investing deals increased 13 percent between 2013 and 2014 following a 20 percent increase in the previous year.

Traditionally, foundations have split their impact investments into two pots, one for mission-related investments, designed to generate market-rate returns and maintain and grow the value of the endowment, and the other for program-related investments. PRIs can include loans, guarantees, or equity investments that advance a charitable purpose without expectation of market returns. PRIs are an attractive use of a foundation’s endowment as they allow foundations to recycle their limited grant funds and they count towards a foundation’s charitable distribution requirement of 5 percent of assets. However they have been underutilized to date due to perceived hurdles around their use–in fact among the thousands of foundations in the United States, currently only a few hundred make PRIs.

But this is changing, spurred on by both entrepreneurial local action and federal leadership. On April 21, the White House announced that the U.S. Department of the Treasury and Internal Revenue Service had finalized regulations that are expected to make it easier for private foundations to put their assets to work in innovative ways. While there is still room for improvement, by clarifying rules and signaling mainstream acceptance of impact investing practices these changes should lower the barriers to entry for some institutional investors.

This federal leadership is welcome, but is not by itself enough to meet the growing demand for capital investment in the civic sector. Local innovation, spurred by new philanthropic collaborations, can be transformative. On April 25 in Chicago, the Chicago Community Trust, the Calvert Foundation, and the John D. and Catherine T. MacArthur Foundation launched Benefit Chicago, a $100 million impact investment fund that aims to catalyze a new market by making it easier for individuals and institutions to put their dollars to work locally and help meet the estimated $100-400 million capital needs of the civic sector over the next five years.

A Next Street report found that the potential supply of patient capital from foundations and investors in the Chicago region was more than enough to meet the demand – if there were ways to more easily connect the two. Benefit Chicago addresses this market gap by making it possible for individuals to invest directly through a brokerage or a donor-advised fund and for the many foundations without dedicated impact investing programs to put their endowments to work at scale. All of the transactional details of deal flow, underwriting, and evaluation of results are handled by the intermediary, which should lead to greater efficiency and a significant increase in the size of the impact investing market in Chicago.

In the last few years, a new form of impact investing has made measurement of social return to investments even more concrete. Social impact bonds (SIBs), also known as pay for success (PFS) financing, are a way for private investors (including foundations) to provide capital to support social services with the promise of a return on their investment from a government agency if some agreed-upon social outcomes are achieved. These PFS transactions range from funding to support high-quality early childhood education programs in Chicago to reduction in chronic individual homelessness in the state of Massachusetts. Both the IRS and the Chicago announcements are bound to contribute to the growth of the impact bond market which to date represents a small segment of the impact investing market.

These examples illustrate a rare and wonderful convergence of leadership at the federal and local levels around an idea that makes sense. Beyond simply broadening the number of ways that foundations can deploy funds, growing the pool of impact investments can have a powerful market-making effect. Impact investments unlock other tiers of capital, reducing risk for private investors and making possible new types of deals with longer time horizons and lower expected market return.

In the near future, these federal and local moves together might radically change the philanthropic landscape. If every major city had a fund like Benefit Chicago, and all local investors had a simple on-ramp to impact investing, the pool of capital to help local organizations meet local needs could grow exponentially. This in turn could considerably improve funding for programs—like access to quality social services and affordable housing—that show impact over the long term.

Impact investing can be a bright spot in an otherwise somber fiscal environment if localities keep innovating and higher levels of government evolve to support, incentivize, and smooth its growth. These announcements from Washington and Chicago are examples of the multilevel leadership and creative institutional change we need to ensure that we tap every source of philanthropic capital, to feel some abundance in an era where scarcity is the dominant narrative.

Editor's Note: Alaina Harkness is a fellow at Brookings while on leave from the John D. and Catherine T. MacArthur Foundation, which is a donor to the Brookings Institution. The findings, interpretations and conclusions posted in this piece are solely those of the authors and not determined by any donation.

Ranking U.S. metro areas, or counties, or even countries, by some fixed metric is a straightforward and often useful way to start a deeper dive into a larger body of research. For example, the top 10 counties by share of taxpayers claiming EITC, or the top 10 metro areas by change in prosperity. But what if the phenomenon being measured is more complex, has interacting characteristics that make a top 10 list less useful?

In new research, Brookings Senior Fellow Alan Berube, along with his colleagues at the Metropolitan Policy Program, and John Irons of the Rockefeller Foundation, ask “What makes an economy inclusive?” Inclusive economies, they say, “expand opportunities for more broadly shared prosperity, especially for those facing the greatest barriers to advancing their well-being.” A new Rockefeller Foundation framework identifies five characteristics of inclusive economies: equity, participation, stability, sustainability, and growth.

A typical ranking approach would list the top 10 inclusive economies (or the bottom 10) based on some score derived from data. It turns out, however, that understanding the “trends and relationships that might reveal the ‘big picture’ of what makes an economy inclusive” doesn’t lend itself to typical ranking techniques, and instead requires looking at relationships among the characteristics to ascertain that “big picture.”

Take, for example, equity, defined as: “More opportunities are available to enable upward mobility for more people.” For this analysis, Brookings researchers used 16 discrete indicators—such as the Gini coefficient, median income of less-educated workers as a share of overall median income, and transportation costs as a share of income—to come up with an equity score for each of the 100 largest U.S. metro areas. (Likewise, each of the other four inclusive economy indicators are composites of many discrete indicators, for a total of about 100 across the five.) Looking at equity alone, the top 10 metro areas are:

1. Allentown, PA-NJ
2. Harrisburg, PA
3. Ogden, UT
4. Scranton, PA
5. Des Moines, IA
6. Salt Lake City, UT
7. Wichita, KS
8. Grand Rapids, MI
9. Pittsburgh, PA
10. Worcester, MA-CT

Top 10 lists can also be fashioned for the other four dimensions in the inclusive economies research, each showing a different mix of U.S. metro areas. For example, the top three metro areas in the growth characteristic are San Jose, CA; Houston, TX; and Austin, TX. For participation: Madison, WI; Harrisburg, PA; and Des Moines. Stability: Madison; Minneapolis, MN-WI; and Provo, UT. And, sustainability: Seattle; Boston; and Portland, OR-WA. In fact, 30 different metropolitan areas are present in the combination of the five inclusive top 10 lists, spanning the country from Oxnard, to Omaha, to Raleigh. The individual top 10 lists for each inclusive economy characteristic look like this:

Because these rankings each impart useful and distinctive information about metro economies, Brookings researchers next combined the data into an overall ranking of the 100 metro areas “based on their average rankings on individual indicators for each of the five inclusive economy characteristics.” Instead of generating a ranking from 1 to 100, the analysis produces a grid-like chart that shows how metro areas fare not only in terms of inclusiveness (top to bottom), but also along a left-to-right spectrum that demonstrates the trade-offs between growth and equity. Here’s a sample from the chart (visit and study the chart here; note that wealth is depicted but by itself is not part of the inclusive economy score):

One thing that stands out when considering this colorful chart against the disaggregated top 10 lists is how unrelated they seem to be. San Jose sits at the upper right position of the chart, suggesting that it ranks as one of the most inclusive metro economies, and yet it ranks only 51st on equity. By contrast, Allentown, PA—on the left of the second row—ranked first in equity, but lower on other measures. However, taken as a whole, both Allentown and San Jose are in the top 20 metro areas overall for inclusiveness. Detroit sits along the bottom row of the inclusiveness chart. Among the five characteristics, it posts its highest rank in growth (37th overall), with much lower ranks in the other categories, even though it ranks 29th for wealth. Las Vegas, NV, is one of the least wealthy metro areas (91st), but ranks 19th in terms of equity.

Berube and Irons point to what they call “a few important insights” about the chart and these data:

• Judged across all five characteristics, the “most” and “least” inclusive metro economies are geographically and economically diverse.
• More equitable metropolitan economies also exhibit higher levels of participation and stability. 
• Growth and equity vary independently across metropolitan areas. 
• Metro areas with similar performance across the five characteristics may not possess the same capacity to improve their performance.

For more detailed discussion, and the complete inclusive economies chart, see “Measuring ‘inclusive economies’ in metropolitan America,’ by John Irons and Alan Berube.

See also “A metro map of inclusive economies,” showing metro areas that are similar to others in these outcomes.

Finally, download detailed information on the composition of the 100 indicators used to measure the five inclusive economies indicators.

In the early hours of Sunday June 12, 2016, a madman perpetrated the mass murder of 49 people in a nightclub considered a safe space for Orlando’s LGBT community. 

Politicians quickly went into gear to exploit this tragedy to push their own agendas. Glaringly silent on the civil rights of LGBT communities, Donald Trump and Ted Cruz repeated their calls to ban, deport, and more aggressively prosecute Muslims in the wake of this attack. As if Muslims in America are not already selectively targeted in counterterrorism enforcement, stopped for extra security by the TSA at airports, and targeted for entrapment in terrorism cases manufactured by the FBI. 

Other politicians reiterated calls for Muslim communities to fight extremism purportedly infecting their communities, all while ignoring the fact that domestic terrorism carried out by non-Muslim perpetrators since 9/11 has had a higher impact than the jihadist threat. Asking Muslim American communities to counter violent extremism is a red herring and a nonstarter. 

In 2011, the White House initiated a countering violent extremism (CVE) program as a new form of soft counterterrorism. Under the rubric of community partnerships, Muslim communities are invited to work with law enforcement to prevent Muslims from joining foreign terrorist groups such as ISIS. Federal grants and rubbing elbows with high level federal officials are among the fringe benefits for cooperation, or cooptation as some critics argue, with the CVE program. 

Putting aside the un-American imposition of collective responsibility on Muslims, it is a red herring to call on Muslims to counter violent extremism. An individual cannot prevent a criminal act about which s/he has no knowledge. Past cases show that Muslim leaders, or the perpetrators’ family members for that matter, do not have knowledge of planned terrorist acts. 

Hence, Muslims and non-Muslims alike are in the same state of uncertainty and insecurity about the circumstances surrounding the next terrorist act on American soil. 

CVE is also a nonstarter for a community under siege by the government and private acts of discrimination. CVE programs expect community leaders and parents to engage young people on timely religious, political, and social matters. While this is generally a good practice for all communities, it should not be conducted through a security paradigm. Nor can it occur without a safe space for honest dialogue.

After fifteen years of aggressive surveillance and investigations, there are few safe spaces left in Muslim communities. Thanks in large part to mass FBI surveillance, mosques have become intellectual deserts where no one dares engage in discussions on sensitive political or religious topics. Fears that informants and undercover agents may secretly report on anyone who even criticizes American foreign policy have stripped mosques from their role as a community center where ideas can be freely debated. Government deportations of imams with critical views have turned Friday sermons into sterile monologues about mundane topics. And government efforts to promote “moderate” Muslims impose an assimilationist, anti-intellectual, and tokenized Muslim identity. 

For these reasons, debates about religion, politics, and society among young people are taking place online outside the purview of mosques, imams, and parents. 

Meanwhile, Muslim youth are reminded in their daily lives that they are suspect and their religion is violent. Students are subjected to bullying at school. Mosques are vandalized in conjunction with racist messages.  Workers face harassment at work. Muslim women wearing headscarves are assaulted in public spaces. Whether fear or bigotry drives the prejudice, government action and politicians’ rhetoric legitimize discrimination as an act of patriotism.

Defending against these civil rights assaults is consuming Muslim Americans’ community resources and attention. Worried about their physical safety, their means of livelihood, and the well-being of their children in schools; many Muslim Americans experience the post-9/11 era as doubly victimized by terrorism. Their civil rights are violated by private actors and their civil liberties are violated by government actors—all in retribution for a criminal act about which they had no prior knowledge, and which they had no power to prevent by a criminal with whom they had no relationship.

To be sure, we should not sit back and allow another mass shooting to occur without a national conversation about the causes of such violence. But wasting time debating ineffective and racialized CVE programs is not constructive. Our efforts are better spent addressing gun violence, the rise of homophobic violence, and failed American foreign policy in the Middle East.

We all have a responsibility to do what we can to prevent more madmen from engaging in senseless violence that violates our safe spaces.

This article was originally published in the Huffington Post.

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Puerto Rico is the latest, but probably not the last, case of a local government confronting financial strains that call into question its ability to meet its obligations to bondholders while providing services to its taxpaying constituents. Puerto Rico is, of course, a special case because it is a territory, not a state or municipality. Will Puerto Rico’s problems have ripple effects for the $3.7 trillion U.S. municipal bond market? What about the resolution of Detroit's bankruptcy? How will state and local governments and the courts weigh the interests of pensioners, employees, taxpayers and bondholders when there isn't enough money to go around?

On Tuesday, July 12, the Hutchins Center on Fiscal and Monetary Policy at Brookings webcasted the keynote address from the 5th annual Municipal Finance Conference, delivered by the sitting governor of Puerto Rico, Hon. Alejandro García Padilla. After Governor Padilla’s remarks on Puerto Rico’s future, Hutchins Center Director David Wessel moderated a panel on the politics and practice of municipal finance in the post-Detroit and post-Puerto Rico era.

Join the conversation and tweet questions for the panelists at #MuniFinance.

Video

• Keynote address by Alejandro García Padilla
• Panel: The muni market in the post-Detroit and post-Puerto Rico era
• Changing patterns in household ownership of municipal debt
• Municipal borrowing costs and state policies for distressed municipalities
• Municipal finance structure and Chapter 9 creditor priorities
• Term limits and municipal borrowing costs
• Why has regional income convergence in the U.S. declined?
• State strategies for detecting fiscal distress in local governments
• Pensions and other post-employment benefits

Transcript

• Download the uncorrected transcript (.pdf)

Event Materials

• Garcia Padilla Slides
• 20160712_munifinance_puertorico_detroit_transcript

Editor’s note: This week the Democrats gather in Philadelphia to nominate a candidate for president and adopt a party platform. Given that there are no minority reports to the Democratic platform, it is likely that it will be adopted as-is this week. And so we can begin the comparison of the two major party platforms. For those who say there are no differences between the Republican and Democratic parties, just read the platforms side-by-side. In many instances, the differences are—as Donald Trump would say, yuuuge. But in one surprising instance, the two parties actually agree. This piece walks readers through one of the biggest contrasts, while an earlier piece by Elaine Kamarck detailed a striking similarity.

When it comes to Republicans and the environment, black is the new green. In addition to denouncing “radical environmentalists” and calling for dismantling the EPA, the platform adopted in Cleveland yesterday calls coal “abundant, clean, affordable, reliable domestic energy resource” and unequivocally opposes “any” carbon tax.

Meanwhile, Democrats are moving in the opposite direction. By the time the party’s draft 2016 platform emerged from the final regional committee meeting in Orlando, it contained a robust section on environmental issues in general and climate change in particular. One of the many amendments adopted in Orlando contains the following sentence: “Democrats believe that carbon dioxide, methane, and other greenhouse gases should be priced to reflect their negative externalities, and to accelerate the transition to a clean energy economy and help meet our climate goals.” In plain English, there should be what amounts to a tax (whatever it may be called) on the atmospheric emissions principally responsible for climate change, including but not limited to CO2.

As Brookings’ Adele Morris pointed out in a recent paper, this proposal raises a host of design issues, including determining initial price levels, payers, recipients, and uses of revenues raised. It would have to be squared with existing federal tax, climate, and energy policies as well as with climate initiatives at the state level.

But these devilish details should not obstruct the broader view: To the best of my knowledge, this is the first time that the platform of a major American political party has advocated taxing greenhouse gas emissions. Many economists, including some with a conservative orientation, will applaud this proposal. Many supporters and producers of fossils fuels will be dismayed.

It remains to be seen how the American people will respond. In a survey conducted in 2015 by Resources for the Future in partnership with Stanford University and the New York Times, 67 percent of the respondents endorsed requiring companies “to pay a tax to the government for every ton of greenhouse gases [they] put out,” with the proviso that all the revenue would be devoted to reducing the amount of income taxes that individuals pay. Previous surveys found similar sentiments: public support increases sharply when the greenhouse gas tax is explicitly revenue-neutral and declines sharply if it threatens an overall increase in individual taxes.

Once this plank of the Democratic platform becomes widely known, Republicans are likely to attack it as yet another example of Democrats’ propensity to raise taxes. The platform’s silence on the question of revenue-neutrality may add some credibility to this charge. Much will depend on the ability of the Democratic Party and its presidential nominee to clarify its proposal and to link it to goals the public endorses.