NDN Blog

Wed, 12/18: "Reinvent Immigration Strategy" with Star-Studded Lineup

Join NDN and the New Policy Institute founder and President Simon Rosenberg tomorrow, Wednesday, December 18th, 2-3:30pm for a Google+ Hangout roundtable discussion on the future strategy for immigration reform. Leading the discussion with a true all star cast is Luis Ubinas, Former President of the Ford Foundation.

Also participating in the roundtable:

Jose Antonio Vargas, Founder, Define American
Maria Teresa Kumar, CEO/President of Voto Latino & MSNBC Contributor
Cristóbal J. Alex, President of the Latino Victory Project and the Latino Victory Foundation
Mike McGeary, Co-Founder and Director of Engine Advocacy
Janet Murguía, President and CEO of the National Council of La Raza
Ali Noorani, Executive Director, National Immigration Forum
Peter Leyden, Host of the Reinvent America series & Founder of Reinventors

The Reinventors team writes: "The current strategy for getting comprehensive immigration reform passed through Congress to become the law of the land is close – but no cigar. It’s doubtful that on its current trajectory that the bill will get across the finish line. It’s time to Reinvent Immigration Strategy. Luis Ubinas, recent president of the Ford Foundation and our anchor, thinks the basic strategy should shift to a focus on how Republicans have the most to gain from making immigration work. Given the current stall, what is a better short-term plan? What new tools or entrepreneurial approaches might shake up the status quo? If the current push falls short, then what’s plan B?"

More information is available here. We hope you can join us!

Unravelling America’s Problems with Inequality and Upward Mobility

          President Obama deserves at least two cheers for his recent economic address.  In an unusually clear-eyed assessment of how the economy has shaped our current politics and national mood, he traced most people’s disillusion with government to their “daily battles to make ends meet.”  The “defining challenge of our time,” he declared, is to make “sure our economy works for every working American.”  For his part, the President pledged to devote his second term to restoring upward mobility and reducing inequality.
            To make progress on these fronts, the President and many progressives should first step back from some common populist myths.  In his address, for example, the President stressed the populist trope that the median income today is only 8 percent higher than it was in 1979.  The clear implication is that middle-class Americans have been caught in an economic squeeze for nearly 35 years, and Washington should turn away from the policies of the 1980s and 1990s. 
            This view, at best, is only partly right.  It is the case that today’s extraordinary inequality began in the latter-1970s.  In 1976, the share of national income claimed by the top 1 percent of Americans fell to less than 9 percent, its lowest point in the 20th century.  Since 1977, however, their share of the economy’s rewards has grown steadily and sharply, reaching more than 23 percent in 2008, its highest level since 1928.  Nevertheless, most people’s incomes continued to grow at reasonable rates through the 1980s and 1990s.  If that strikes many Americans as implausible from today’s vantage, it’s only because much of those income gains were swept away over the last decade.  The challenge of restoring upward mobility comes mainly from what has happened economically since 2002.   
            Here is what has really happened to incomes, based on data released recently by the Census Bureau.  Across all households – all ages, races, and both genders -- the inflation-adjusted median income increased by an average of 1.7 percent per-year from 1983 to 1989, or by nearly 12 percent over the course of the Reagan expansion.  The recession of 1990-1991 took back about one-third of that progress, leaving a typical middle-class household with net income gains of just under 8 percent from 1983 to 1991. Those gains were followed by more income growth through the Clinton expansion, averaging another 1.4 percent per-year after inflation.  The recession of 2001 took back one-fifth of those gains, leaving a typical middle-class household with net income growth of more than 10 percent from the 1990s and 18 percent from 1982 to 2002.  Nor did upward mobility stall out in this period: Throughout the 1980s and 1990s, those who had long lagged behind achieved the greatest gains, namely, households headed by African Americans and by women.
            The income squeeze most Americans feel today owes its bite almost entirely to the developments of the last decade.  Through the Bush expansion of 2002 to 2007, household income growth plummeted to just 0.2 percent per-year.  Moreover, those meager gains were followed by the Great Recession, which cost the average household an unprecedented 5 percent of their incomes.  Those losses wiped out not only all of the income growth from 2002 to 2007, but also 40 percent of the net gains of the 1990s.  Even worse, the economic damage from the 2008-2009 crisis, on top of some new problems, continued to eat away at incomes.  In 2010-2011, American households gave back, on average, another 4 percent of their incomes.  Those losses finally stabilized in 2012, when household incomes were virtually unchanged.  All told, the median income of American households declined nearly 10 percent from 2002 to 2012.
            To get out of this hole, policymakers have to confront the two new dynamics which largely define the last decade economically, globalization and technological change.  There is no possible retreat from globalization, a historic advance that has drastically reduced poverty across much of the world and driven innovation and cost savings here at home.  But the intense competition generated by globalization also produces unprecedented pressures on businesses to cut their costs, and then directs those pressures to jobs and wages.  Policymakers can help relieve some of those cost pressures, starting with a stronger commitment to contain the health care costs for both employers and workers.  They also could help jumpstart stronger job creation with financial reforms that link a bank’s access to the Fed’s virtually-free funds to its willingness to provide capital for young businesses.
            Washington also can help tens of millions of Americans to upgrade their skills for an economy that now provides few rewards for those without the training and skills to operate effectively in workplaces dense with information and internet technologies.  For a modest cost, for example, the federal government can provide grants to hundreds of community colleges to keep their computer labs open and staffed on weekends and evenings, so any adult can walk in and receive free training in information and internet technologies.
            The economic record also tells us that the government got a number of things right in the 1980s and 1990s.  As in the 1950s and 1960s, usually sensible macroeconomic policies tempered the business cycles, especially after dealing with the oil-shock inflations of the 1970s. Successive presidents and congresses also continued to liberalize trade in the 1980s and 1990s, encouraging businesses and workers to shift their resources to areas where they held powerful advantages even as Germany, Japan and other advanced countries began to compete actively again.  And from the late 1970s onward, Washington reinforced those advantages by deregulating transportation, telecommunications, and other sectors -- including finance, where policymakers went too far in the late 1990s.
            Public investments in infrastructure remained generally robust until the 1990s, and even then, the private sector sunk tens of billions of dollars into new information and telecommunications infrastructure.  Higher education programs helped tens of millions of Americans expand their human capital, building on the GI Bill of the 1950s and 1960s with major expansions in student assistance in the 1980s and 1990s.  And science and technology policies continued to promote innovation by aggressively funding government research institutes and through technology competitions sponsored by the Pentagon (including the internet). 
            To restore income gains and upward mobility, Washington also needs to revisit what works.  Recommit macroeconomic policy to healthy growth by ending mindless austerity and doubling down on public investments in infrastructure and basic research and development.  Further expand the markets for innovative American goods and services by completing the current trade liberalization talks with the European Union and much of Asia.  Help millions of young people complete their higher education by reforming student assistance – for example, by replacing most current loan and grant programs with federally-funded free tuition at public institutions that limit their future cost increases to overall inflation. 

            There is no iron-clad guarantee that these approaches will restore the reasonable income gains of the 1980s and 1990s, much less the stronger progress seen in the 1950s and 1960s.  Nevertheless, they provide a credible place to begin, one based on the real economic record and the actual nature of our economic problems.    

This post was originally published on Dr. Shapiro's blog

Statement from NDN's Rob Shapiro on New Jobs Report

 “Today’s upbeat jobs news is, simply put, quite good news.  Yes, the sharp dip in unemployment from 7.3 percent in October to 7.0 percent in November, with gains of 203,000 nonfarm jobs, reflects in part the return of furloughed federal workers and those whose jobs depend on them.  But the November gains were so substantial, because the government shutdown obscured steady improvements in the jobs market through both October and November. That’s why the jobless rate dropped three-tenths of a percent even as labor force participation rose, average working hours increased, and the number of part-time workers who want full-time work declined steeply.  And this is the second encouraging report in two days -- we found out yesterday that GDP grew at a 3.6 percent rate in the third quarter.  All of this helps explain why the largest employment gains last month came not in government, but in consumer-sensitive areas such including manufacturing, health care and transportation and warehousing.”

Dr. Robert Shapiro, 12/6/2013

Event Re-Cap: DHS's Alan Bersin on Deepening US-Mexico Ties

On November 22, NDN and the New Policy Institute were honored to welcome Alan Bersin, Assistant Secretary of International Affairs and Chief Diplomatic Officer at the US Department of Homeland Security (DHS), to discuss the deepening and vital US-Mexico bilateral relationship.

You can watch the discussion here:

A/S Bersin highlighted how increasingly coordinated US-Mexico efforts on security that were “unthinkable 15 years ago” are paving the way for a greater focus on shared economic prosperity and global competitiveness.  This year US and Mexico officials committed to joint border patrols and to work to strengthen Mexico’s rule of law on its border with Guatemala.  The vision of our shared US-Mexico border is shifting from a divisive line to the focal point of “the movement of goods, people, ideas, [and] images on a massive scale back and forth between our two countries.”  While there is still much work to do on issues of security, immigration reform, and bilateral communications, the prospects for a shared future are bright.  That is especially evident when considering the $1.4 billion dollars worth of trade crosses the US-Mexico border per day and the endless prospects for educational and energy exchange.

A/S Bersin and NDN remain confident that Congress is not as divided on immigration reform as commonly believed and that it can pass meaningful reform that further develops this relationship with our southern neighbor.  (See our recent discussion with Reps. Garcia, Denham, and Horsford).

As A/S Berson stated: "el futuro ya no es lo que era antes" (“the future isn’t what it used to be”). The “future of the next 50 years, if we continue to get this right, is actually the US-Mexico Relationship and more broadly the North American relationship.”

A transcript of the event is available here.

Event Video: Rep. Adam Smith on U.S. Middle East Strategy

On December 5th, 2013 – NDN’s Middle East and North Africa Initiative hosted a discussion with Rep. Adam Smith, Ranking Member of the House Armed Services Committee. Topics covered include economic and diplomatic engagement, Iran, Egypt, Syria, military aid, and a broader regional strategy. Full video of the event is available below.

Morocco: The West’s Gateway to Africa?

“There isn’t much to actually do in Dakhla, but it’s a beautiful place to just be.” This aphorism came from a middle-aged Moroccan woman seated next to me as we flew into the small coastal city in the Western Sahara. She was right that Dakhla is gorgeous, but if the Moroccan government sees its vision come to pass, there will soon be much more than beaches and dunes to attract people to the city, and much more to do.

The small metropolis of 170,000 barely existed a decade a ago, but after millions of dollars of investment it now boasts greatly expanded infrastructure, housing, business activity, and stands ready to play an important role at the front lines of Morocco’s plan to become a platform for access to the greater African continent. The continually expanding port now supplies over three quarters of the seafood in Morocco in addition to growing exports to Europe, Asia, and Latin America. Meanwhile, the last ten years have seen the creation of over 3,000 small and medium sized businesses in the area. And this growth is no accident. Now that the violence between the Polisario Front and the Moroccan government is in the distant past and a final negotiated settlement appears eventually inevitable — the government believes that Dakhla and the greater south are positioned to be one of the first success stories of the new economic regionalization plan and can serve as a springboard for investments from international corporations interested in serving larger markets in west and central Africa.

Since the uprisings of the Arab Spring, the Kingdom of Morocco has fared far better than many of its neighbors, with a new constitution ushering in several years of reform rather than revolution. This has allowed the country to set itself apart from some regional competitors and left it prepared to leverage its significant advantages in banking, location, and stability — key considerations for succeeding on a continent that is quickly becoming harder and harder for corporations to ignore. Africa already represents more consumer spending than Russia with a larger GDP than Brazil and Russia combined. Over the next decade those numbers are projected to grow tremendously as 17% of the world’s population will call Africa their home by 2020 and rapid urbanization and economic growth will continue to expand the middle class.

It is often said in Morocco that Tangier is their gateway to the north while Dakhla is their gateway to the south. With free trade agreements in place with the United States, EU, Turkey, and several Arab countries, the government appears to have the international structures in place that can compliment their long term investments in education and governance — critical to realizing their vision of becoming a regional platform and keeping those doors wide open. When King Mohammed VI visits Washington, DC this week to there will surely be discussions about security cooperation and cultural dialogue. But rest assured that the delegation will also be looking to put on their best business-friendly face as they roll out the welcome mats to potential investors. At a time when stable governments in the region seem scarce and economic diplomacy has become the norm rather than the exception, the Moroccans are likely to find a warm reception.

Event Re-Cap: "Reps. Joe Garcia (D), Jeff Denham (R), Steven Horsford (D) Discuss Imm Reform"

NDN thanks Representatives Joe Garcia (D-FL), Jeff Denham (R-CA), and Steven Horsford (D-NV), as well as TV host and reporter Fernando Espuelas for joining us today for a discussion of immigration reform.  

Reps Garcia and Horsford are original sponsors of House comprehensive immigration reform bill H.R. 15, and Rep Denham is the first Republican cosponsor.  Whether via that bill or others, all are united in their determination to continue working on immigration reform this year.  They challenge the House to "have a full debate on these issues," to bring bills to the floor, and to pass legislation that boosts the US economy, creates jobs, secures our future workforce, secures our borders, and brings 11 million people out of the shadows.  They are confident there is enough support in the House to pass meaningful immigration reform.

Representative Denham hinted there would be more Republican cosponsors of H.R. 15 coming soon, but also mentioned other possible bills from Reps Issa and Cantor.  He encouraged advocates to ask their Members who don't support existing legislation 'what they do stand for' so that together, Republicans and Democrats can reach a solution that fixes our broken immigration system.

In case you missed it, the video is available here:

"It's time for all of us to work together to get comprehensive immigration reform done now....The support is there in a bipartisan way," said Rep. Horsford.

Also see the following articles covering the event:

Why Corporate Tax Reform Is So Desirable – and So Hard to Achieve

 In a political environment most notable today for its partisan trench warfare, serious conversations across party lines are nonetheless taking place over a major reform of corporate taxes.  This unusual instance of comity comes from a genuine consensus that lowering the corporate tax rate – the favored goal would move it from 35 percent to 28 percent – would be good for the economy.  As an economic matter, a revenue-neutral cut in the corporate tax rate has something for almost everyone:  It should lead directly to more investment and higher profits, which in turn should produce stronger growth and, with any luck, raise the wages of some workers.  Yet, serious corporate tax reform will always be a long shot unless the parties can agree on how to pay for it and what to do about all the businesses that aren’t subject to it.   

            The hardest piece of this puzzle involves where to find the money for a lower rate.  If, as expected, profits, growth and some wages go up, part of the cost should be relatively painless – but those additional revenues would amount to more of free appetizer than a whole lunch.  And one popular target for additional revenues, the special tax deductions for certain investments by oil and gas companies, would provide no more than a palate cleanser.  In the end, there are only a few pieces of the corporate code large enough to finance meaningful rate reductions – and all of them are fiercely defended by the companies that benefit most from them. 
            The biggest target is accelerated depreciation – some $550 billion over 10 years to provide in special tax deductions that offset the cost of large corporate investments, and at a rate faster than the equipment or structure actually depreciates.  For the biggest beneficiaries, think of the communications equipment industry, aircraft makers, mining and industrial equipment producers, and other heavy manufacturing.   Pushing the corporate rate down to 28 percent rate would offset their economic costs, while helping other industries even more.  But the revenues from ending accelerated deprivation for corporations would only be enough to lower the rate to a little less than 31 percent. 
            Another costly provision is “deferral” – the ability of American multinationals to delay paying any U.S. corporate taxes on their foreign profits until they transfer those profits from their foreign subsidiaries to the parent corporation back in America.  While experts argue over how much revenues would actually result from ending deferral, it would spread the pain: That’s because the industries affected most by an end to deferral make relatively modest use of accelerated depreciation – think of our leading software, Internet and pharmaceutical firms.  The catch lies in the indirect costs.  American multinationals earn foreign profits by out-competing their German, British and Japanese rivals in foreign markets.  But unlike the United States, Germany, Britain, Japan and nearly every other country taxes corporations only on the income they earn in their home markets.  So, ending deferral would force only U.S. companies to pay taxes both abroad and at home, leaving them at a competitive disadvantage.  Holding them harmless while ending deferral would require a corporate rate even lower than 28 percent – and the revenues gained by ending deferral, along with accelerated depreciation, wouldn’t be enough to get the rate down to even 28 percent.
            Moreover, corporate tax reform is not the same as business tax reform, not by a long shot.  More than half of all business profits in America are earned by companies that don’t pay the corporate tax, including most investment and legal practices, hedge funds, private equity funds, and privately held companies.  They are all organized as partnerships, LLCs or S-corps, not subject to the corporate tax, and taxed as “pass-throughs:”  The income of such firms is distributed among their owners and then taxed at the owners’ personal tax rate, sometimes as ordinary income and more often as capital income.
            As an economic matter, the right answer is to tax all business income at the same rate, whether the business is a corporation or something else.  It also would help with funding the lower rate:  For example, ending accelerated depreciation for all businesses, corporate or not, would raise an estimated $775 billion over 10 years instead of $550 billion.  Moreover, a 28 percent rate on all business income mighty well raise substantial revenues, since so much of non-corporate business income today is taxed at the 20 percent rate for capital income.  And that’s a political problem.  To begin, ending the special “carried interest” tax break for hedge funds, private equity funds and real estate trusts might well ignite a Washington firestorm – which could explain why President Obama didn’t try to do it when he held healthy majorities in both house of Congress.  That’s not all: To maintain a level playing field on personal taxes, the current 20 percent tax on the capital gains and dividends of ordinary investors also would have to go to 28 percent up as well.  But if that happened, the shareholders of public corporations would be at a costly disadvantage, since the same income would face a single 28 percent rate when earned by a non-corporate pass-through business, and a rate twice as high when generated by a corporation (28 percent at the corporate level and another 28 percent at the owners’ level).
            This economic logic has led many conservative economists and Republicans to call for repealing all corporate taxes.  Of course, there is no prospect of a bipartisan consensus for doing that.  Rather, the Democratic side of the consensus for a lower corporate tax rate has always insisted that the same corporations make up for any and all revenues lost from cutting the rate.  And that’s a problem which they haven’t yet solved.
This Post was originally published on Dr. Shapiro's blog

Invite: Thurs, 11/14 - Reps. Joe Garcia (D), Jeff Denham (R), Steven Horsford (D) Discuss Imm Reform

Update 11/14: Rep. Steven Horsford of Nevada will also be joining us today.  Looking forward to a great discussion.

In an effort to jumpstart immigration reform in the House, a group of Democrats led by Rep. Joe Garcia (FL) introduced H.R. 15, a combination of the bipartisan comprehensive immigration bill passed out of the Senate Judiciary Committee and the bipartisan border security bill passed out of the House Homeland Security Committee.  A month later, 186 Democrats, almost the entire House caucus, and 3 Republicans have signed on as cosponsors in an effort to pressure leadership to bring it or any other immigration reform legislation to a vote on the House floor.  

We commend Rep. Jeff Denham (CA) for being the first Republican to sign on to H.R. 15, reaching across the aisle to seek a solution that brings 11 million immigrants out of the shadows, fixes the system for future immigration, and boosts the entire US economy and its future global competitiveness.

We are pleased to welcome Reps. Garcia and Denham for a discussion on immigration reform moderated by TV host and reporter Fernando Espuelas.  The Congressmen will each offer preliminary remarks highlighting why immigration reform is imperative for their states and the entire US and its prospects going forward, and then will be joined by Simon Rosenberg for an audience Q&A.  Please join us!

When: Thursday, November 14, 2013. 12-1:15pm
Lunch will be served at 12noon, presentation will begin at 12:15, followed by Q&A

Where: NDN Event Space, 729 15th Street NW, 1st Floor

To RSVP, please email ebuckhout@ndn.org with “RSVP Immigration Nov 14th” in the subject line. 

For more of our analysis about the border and immigration reform, visit this page on our site. Also see Simon’s op-ed in on how the two parties are closer to a deal than ever before and this blog on how immigration reform is alive in the House.

We hope you can join us for this timely and informative discussion.  This is an open event- please feel free to forward to others who might be interested.

We look forward to seeing you on the 14th!

Friday, Nov 22nd - DHS's Alan Bersin on Deepening US-Mexico Ties

As Vice President Biden remarked during the recent High Level Economic Dialogue in Mexico, “there is no reason why our partnership, the U.S.-Mexico partnership, should not be among the strongest that we have.”  Mexico is now the US’s second largest export market, third ranked trade partner, and fourth largest source of tourism revenue.  Two-way trade surpassed $500 billion in 2012, with over $1 billion worth of trade crossing the US-Mexico border each day.  Recent announcements on security collaboration as well as the first meeting of the US-Mexico High Level Economic Dialogue indicate that this crucial bilateral relationship is deepening, broadening and improving.   

On November 22nd, NDN and the New Policy Institute are pleased to welcome Alan Bersin, Assistant Secretary of International Affairs and Chief Diplomatic Officer at the US Department of Homeland Security (DHS), to a discussion of the US-Mexico bilateral relationship.  Previously having served as Commissioner of US Customs and Border Protection and as DHS’s Special Representative for Border Affairs, Bersin is one of the administration’s foremost experts on the border region.  He has travelled extensively in Mexico, most recently in July 2013 to accompany former Secretary of Homeland Security Janet Napolitano to high-level meetings in Matamoros and Mexico City. Drawing upon these experiences, Bersin will share his perspective on improvements in the US-Mexico bilateral relationship, after which he will take questions from the audience.

This event will take place at NDN, 729 15th St NW, 1st floor, from 12:00 to 1:30 p.m.
Lunch will be served at 12:00 and the discussion will begin promptly at 12:15.

To RSVP please email ebuckhout@ndn.org with “US-Mexico RSVP” in the subject line. 

This event is open to the press.  Live webcast will be available here and video recording will be posted at ndn.org afterward.

We look forward to seeing you on the 22nd! 

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