NDN Blog

Monday Musings on 2016

I'm going to start a new weekly look at 2016 and the broader political environment.  Check back Monday mornings for this new feature from NDN - Simon

We are in the midst of an extraordinary political period here in Washington. The remarkable Papal visit, the end of Boehner, a Chinese state visit, Putin’s offensive, the UN today, a possible govt shutdown, and of course Bryce Harper getting strangled in the Nats dugout by a Phillies pitcher. Some observations on this big week:

- The GOP “establishment” that was formed through two Bush Presidencies and Boehner’s Speakership has lost its hold on power, perhaps for good. You see it in the Presidential race now w/the rise of Trump, Carson, Fiorina, Cruz and even to some degree Rubio, and we see it now in the House. A new GOP is emerging now, and it is still too early to tell where it will go, but it is unlikely to be in more constructive direction than the current path. It is also increasingly hard to imagine how Jeb Bush survives in this new dynamic (and he has already moved into the second tier of the GOP field).

- The first Democratic debate is in two weeks, Tuesday October 13th. Given how much the two GOP debates affected their their field (Walker and Bush faded, Carly, Carson and Rubio gained) the Dem CNN debate is shaping up to a very consequential event in the 2016 campaign. Don’t make any plans that night!

- As I argued on this segment from the O’Reilly Factor on Friday night, it is time for the US to adopt a new strategy for Syria. Bringing about a political settlement, and fighting more effectively against ISIS appears to be the next big thing on the President’s plate. We will be watching for hints of a new strategy in the President’s UN speech this morning.

Till next week....

Job Opening at NDN (extended to 9/30), Big Thank You to Corey

So I write with good news, and less good news.

We have an opening for my assistant here at NDN. That’s the good news.

The less than good news is that Corey Cantor, my current assistant, will be moving on. It is our tradition here is to bring in an ambitious, smart young person to spend a year as my assistant, working closely with the entire NDN community. Unfortunately for all of us that year is coming up for Corey, and it is time for him to take what he has learned here and go out in the broader world here in DC. Recent assistants are doing really well out there – Anjani and Sam are at USTR, Andres is at Treasury, Jessie has become an important part of Mayor DeBlasio’s team, Chris is working as a legislative assistant in a House office.

Corey’s goal is to go into the Administration, join a Senate or House office, or work in some other policy-related capacity. He has been a terrific member of our team and would add value to any office he joins. If you have ideas for Corey, or want to interview him yourself, please contact him at ccantor@ndn.org. I have some plans for him as well and will be working hard to ensure he lands in a place where he can contribute and learn.

As for the assistant position, please help us find the very best person. See the job description below. Please send cover letter, resume, recommendations and anything else you would like to submit to Corey (ccantor@ndn.org) by 5pm on Wednesday, September 30th. No phone calls please.

Job Description: At NDN, the Assistant to the President is responsible for managing President Simon Rosenberg and the office’s day-to-day operations. This includes managing the President’s schedule; executing weekly emails including NDN’s newsletter, member updates, and other releases via NGP-Van; handling administrative tasks (such as event management, meeting arrangements, scanning documents, and other errands); researching legislation or other policy information for the President’s use. In this role, you will also work closely with other NDN members’ offices and Washington stakeholders. This position allows for growth as well as special projects assigned by the President. Additional responsibilities consist of handling office communications, including answering the main NDN phone-line, processing invoices, assisting with travel logistics, event coordination, and keeping track of written correspondence, and other duties as assigned.

So to sum up – we need your help in finding a new assistant for me, and a great next step for Corey. Anything you can do to help please let us know and thank you in advance. And please thank Corey for his excellent work here at NDN – he has done a great job for me, and for all of us.

-Simon

 

New Op-ed in Time: "Democrats Are Playing a Dangerous Game With the Debate Schedule."

I wrote a new op-ed for Time on the Democratic debate schedule. You can find the full piece at their website or below:

Democrats Are Playing a Dangerous Game With the Debate Schedule.

Unlike the GOP, the Democrats are planning to power down their presence exactly as voters will tune in

The three leading Democratic candidates for President have called for more debates. So have party leaders across the country, including two of the five Vice-Chairs of the Democratic Party. So has the head of the AFL-CIO. So should the Democratic National Committee add more debates? All signs point to yes. Not only do the Republicans have more debates allowing them to reach more voters, but the 2016 primary calendar has bunched up so many states early next year that without a robust debate schedule few voters will be able to meaningful participate in the picking of the Democratic nominee.

Let’s look at this admittedly arcane subject in a bit more detail: As the chart demonstrates, the Republican Party has scheduled ten debates before the end of March of 2016. Most of these debates are in primetime during the week, and each is with a major commercial television news outlet. The first Fox debate proved these debates have the potential to reach tens of millions of people directly, without the candidates or parties spending a dime — a holy grail of political campaign strategy.

The Democrats, on the other, hand have only six debates scheduled in this period and only one in weekday primetime so far. Two of those are with PBS and Univision, limited television networks with smaller reach. Left unchecked, the superior RNC schedule could easily reach 50 to 100 million more eyeballs than the current Democratic schedule—meaning tens if not hundreds of millions of dollars of lost opportunities to persuade, engage and excite the audiences all Democrats will need to win in 2016. But the cost is so far beyond dollars and minds: the debate schedule could affect who wins the Presidency, the Senate and scores of other races across the country.

When you look at the how the primary schedule is stacking up next year, the current Democratic Party strategy looks even harder to justify. As you can see, after the four early states vote – Iowa, New Hampshire, Nevada and South Carolina — 21 more states with more than half of all Democratic primary voters will vote in the 14 days between March 1 and March 15. The scale and speed of this unprecedented compression of the primary calendar means that the only way most voters in these states are going to be able to touch and feel a candidate will be through paid advertising or free debates. Some of these states may not even see a single candidate visit during this short window, and thus are more reliant on debates for getting the information they need to make an informed decision.

Additionally, the compression of the calendar gives an enormous structural advantage to any candidate coming out of the four early states ahead. And if they are also well resourced, it could mean that the election will be for all intents and purposes decided in February of 2016, leaving tens of millions of Americans without the chance to participate in picking a nominee for their party. Having debates during this period is not only necessary given the sheer number of voters going to the polls, but to make sure the winning candidate has the informed consent of a sizable number of their partisans.

The RNC seems to understand all this, having scheduled six of their ten debates during this first quarter window, all with major television networks. The DNC, however, is taking a different approach, having proposed only three debates during this window. The first is on a Sunday night in January during a holiday weekend. The next two—so far without firm dates—are a Spanish language debate (only three of the 21 states have significant Spanish-speaking populations) and one with a far more limited television network (PBS) in a state (Wisconsin) that votes in April. It is conceivable that the Democrats will not have a single English language debate in this period from February 1 to March 15—when tens of millions will be paying attention and voting, and when many believe the nomination will be decided. The GOP already has three scheduled in this voting window, and depending on how their schedule firms up, could have as many as five.

At a time when half the country goes to vote the RNC is ramping up the pace of its debates, while the DNC is slowing its down. By limiting the total number of debate to six it also ensures that the half of the country which votes in the ten weeks after March 15th has little or no chance to hear directly from the candidates.

Simply put, there is no way to justify or defend this strategy. As currently constructed, too few people are going to be able to meaningfully participate in the picking of the nominee of the Democratic Party, something that is inconsistent with our Party’s approach to politics and a threat to the success of the party in the 2016 elections. As many as seven of the dozen or so battleground general election states will vote in this period. The loss of party building in those states is particularly dangerous for Democrats.

There are many ways to improve the current debate schedule but I would begin, as I’ve proposed elsewhere, with shooting for party parity in 2016. The DNC should match the RNC by adding three debates, with at least one coming between Feb. 1 and March 15. The proposed Univision and PBS debates should also be scheduled before March 15, with the Wisconsin debate moving to a March date in an important pre-March 15 state like Colorado, Michigan, Ohio, Texas or Virginia. The DNC could also expand the pool of its media partners to include those with large progressive audiences, and important digital outlets like Facebook (which sponsored the first RNC debate), Instagram, Twitter and Yahoo who reach different audiences than traditional media.

Those calling for a better Democratic Party debate schedule are right. The current schedule, while well intentioned, can and should be improved. It will benefit all Democrats up and down the ticket, and ensure that more than a few million people participate meaningfully in picking the Democratic nominee. The compressed primary schedule next year makes the adding of more debates while so many states vote so quickly even more of a imperative.

 

"The Democratic debate schedule is a mess. Here's how to fix it" - New NDN op-ed on MSNBC

I penned a new op-ed for MSNBC.com on how to improve the 2016 Democratic debate schedule. You can read the full piece here and below. 

"The Democratic Debate Schedule Is A Mess.  Here is How to Fix It." 

The critics are right: If the point of presidential primary debates is to give candidates a forum to make their case to the tens of millions of people who will pick their party’s nominee, the current Democratic debate calendar is wholly insufficient to the task at hand. There are too few debates, too many are on weekends or holidays when viewership is much lower, and there aren’t enough close to when the most consequential voting will take place.

Before we get into the devilish details, it’s important to look at next’s year’s very front-loaded Democratic primary calendar: The four early states – Iowa, New Hampshire, Nevada, and South Carolina – vote in February, followed by 21 more states between March 1 and March 15. The result is that the Democratic nominee will be effectively locked in by mid-March, only six weeks after primary voting begins. It is potentially a very compressed calendar.

As of today, the Republicans have ten debates scheduled before mid-March, while the Democrats have four. Of those debates, the GOP has six debates scheduled in the ten weeks closest to the actual voting, while the Democrats have just one.

The only Democratic debate scheduled for Iowa is taking place 10 weeks before the caucuses, on a Saturday night, and the only New Hampshire debate is happening on the last Saturday before Christmas.
In 2016, the GOP will have debates in Iowa, New Hampshire, Texas, Florida, and twice in South Carolina – all consequential states. The only debate the Democrats have scheduled currently in 2016 is on the Sunday night of the Martin Luther King Day weekend in South Carolina.

Rather than being close to the voting – when people are paying attention – the only Democratic debate scheduled for Iowa is taking place 10 weeks before the caucuses, on a Saturday night, and the only New Hampshire debate is happening on Dec. 19, the last Saturday before Christmas, when the last thing on anyone’s mind will be politics.

Of the eight debates the GOP has scheduled with actual firm dates, six are during the week when viewership is higher. Of the four Democratic debates with firm dates, only one is during the week. The rest are on the weekend, and two – the Iowa and South Carolina debates – are also during holiday weekends.

There are three ways the Democratic National Committee can improve the schedule:

- Move more of the existing debates to weeknights
- Add more debates in the key states prior to March 15
- Remove the limit on debates in case the nominating process goes beyond March 15.

The DNC should also try to get the 2015 debates in Iowa and New Hampshire moved to better days during the week, add Iowa, New Hampshire and one other debate to the early 2016 window, and lock in the proposed Florida and Wisconsin debates before March 15. If in February the election looks like it is going to go to late spring, more debates can be added. There’s no reason to have a cap, or to force candidates to agree to one.

In the digital age, engaging partisans early in the campaign cycle is critical to building an excited base of volunteers and small-dollar donors, such as buoyed both Howard Dean in 2004 and Barack Obama in 2008. The Democratic Party simply has no other tool as powerful as these debates to engage the millions of people needed to win elections in 2016 up and down the ticket in all fifty states. And this tool should be more aggressively deployed for the good of the whole party.

The last time Democrats had an open presidential race, the DNC held 19 debates, starting in April of 2007. The end result of that wide open process was a 53% victory in the general election by Obama and unprecedented levels of citizen engagement in our politics. That wide open and early system helped produce the best election result for the Democratic Party in 44 years, and should only have been significantly altered if there was a powerful rationale and argument from the party leadership. This is particularly true given the enormous policy commitment Democrats are making today to reforming our political and electoral systems to give more Americans a more meaningful voice in their democracy.

While the Democratic Party cannot replicate its 2007-2008 approach, it can improve the current one. As a lifelong Democrat, I am grateful that candidates Hillary Clinton, Martin O’Malley and Bernie Sanders have all asked the DNC to make changes to the current debate schedule. For the good of all Democrats across the country, let’s hope they get on with it in the days to come.

--

Update: You can also check out the current schedules for the Democratic and GOP debates here, as well the full 2016 primary calendar

Update, 9/10 -  In my piece I wrote there were 19 Democratic debates in 2007/8.  In fact, according to Wikipedia, there were 26.  And by this date in 2007 there already had been 9.  Again, given the resounding success of the Democratic Party's Presidential candidate in 2008, it remains hard to understand why the leadership of the DNC felt compelled to make such a dramatic alteration to what worked so well last time and is so consistent with the overall push by Democrats for openness and reform in our political system.  

Update, 9/10 - Last night two DNC Vice Chairs joined the call for more debates. 

Update, 9/10 - The Washington Post's Greg Sargent has published a smart take on all this.

Update, 9/16 - From Politico: "Hillary, DNC face pressure to add debates".

On Donald Trump's New Immigration Plan

On Sunday night, I gave the following quote to Greg Sargent of the Washington Post re Donald Trump and his immigration plan:

“No leading candidate for President in the last generation of US politics has been so explicit about blaming Mexico, Mexican immigrants and our recent high rates of immigration for America's economic troubles as Trump. It is a dramatic escalation in the argument against the current mainstream consensus on immigration by a powerful champion, and helps Trump both strengthen his anti-establishment credentials and speak to the economic anxiety of everyday people. While I disagree with his argument, it would be unwise to underestimate the sophistication, ambition - and divisiveness - of what Trump is attempting to do.

He is the most significant champion of the restrictionist approach to immigration the country has seen in this era of American politics."

You can read the story which Greg published yesterday morning here.  It is a good piece. We also included a round up below of recent stories that have covered the response to Trump's plan.

Trump, Immigration Round Up:

 

Important note on House GOP/sanctuary cities

As we prep for the House "sanctuary cities" bill important to note that due to House GOP's embrace of "King Amendment" that DHS would not be able to prioritize someone like the SF shooter for deportation. 

This is no small point.  If the House GOP wants to prevent future incidents like the one in SF, it requires that once a local community turns over a violent criminal to DHS, DHS would be able to rapidly deport this criminal.  This of course has been central to the Administration's strategy since 2010.  And of course the House GOP voted to roll back this approach, preventing DHS from prioritizing criminals for deportation in both 2013 and 2014.  In fact, preventing DHS from prioritizing criminals for rapid deportation was the only immigration the House GOP passed in the last Congress. 

On Immigration Enforcement, The GOP's Decade of Blocking Sensible Reform

This week we will see, even by Washington standards, a breathtaking level of cynicism from the national Republican Party on the issue of immigration enforcement (the data backing up the arguments in this piece can be found here, here and here).

For a decade now there has been broad consensus that the huge wave of undocumented immigrants who came into the United States from the early 1990s to the later part of 00s needed federal legislation to resolve; that this enormous influx has overwhelmed law enforcement and immigration courts responsible for managing domestic immigration enforcement, degrading the integrity of a system built for a much lower level of unauthorized migration; that local enforcement desperately wanted to spend their limited resources on going after serious criminals and not law-abiding, job holding undocumented immigrants; that enforcing immigration law is a federal not a local responsibility, something reinforced repeatedly in the courts over the past decade; that the passage of comprehensive reform would have created an orderly process allowing law enforcement agencies at all levels to better focus on the imprisonment and deportation of serious criminals.

As we head into a week of significant debate then on immigration enforcement, it is important to remember a few things:

- Since Comprehensive Immigration Reform was first introduced by Senators Ted Kennedy and John McCain in 2005, Republicans in Congress have blocked its passage on four separate occasions. The most significant instances came in 2006 and 2013/4, when the House Republicans refused to even consider sensible bi-partisan bills passed by the Senate and supported at the time by President Bush and then President Obama. Each of these bills would have helped unclogged an overwhelmed immigration enforcement system in the United States, making incidents like what happened in San Francisco far less likely.

- In 2010, recognizing that the primary method we had for helping unclog the overwhelmed immigration enforcement system – CIR – was not going to happen in the President’s first term, DHS implemented new enforcement priorities known as the “Morton Memos” which prioritized illegal border crossers and undocumented immigrants with serious criminal history for deportation. These reforms brought immediate change to the huge immigration enforcement system in the US, and have resulted in the deportation of more serious criminals and has helped keep illegal entries into the US at historic lows.

- In 2013 and again in 2014, the House Republicans passed legislation designed to overturn these smart reforms, making it impossible for example for DHS to prioritize felons like the suspect in the San Francisco shooting for rapid removal through the immigration enforcement system. And the House doubled down on this approach by threatening to shut all of DHS down earlier this year in a standoff over the implementation of these reforms, including the new Priority Enforcement Program. PEP as it is known was launched last year to forge a higher level of cooperation between federal and local law enforcement to more rapidly remove serious criminals from the country.

Finally, it must be said that the attacks on President Obama’s immigration enforcement record are ridiculous. The President has deported more unauthorized immigrants than any President in American history; after a decade and a half of the US absorbing half a million new undocumented immigrants into the county, the net flow of new immigrants on this President’s watch has dropped to zero (an extraordinary public policy achievement); crime along the entire US side of the border is way down, and the two safest large cities in the US today sit on the border, El Paso and San Diego; reforms initiated by DHS throughout the Obama Presidency, including a new round in late 2014, have made the deportation of violent criminals the highest priority for our immigration system. All of the policies used to achieve these outcomes have been opposed by the House Republicans, and further reform, comprehensive immigration reform, has been repeatedly blocked.

So a proper read of the last decade has been one party, the Democrats, have repeatedly advanced proposals and policy that have strengthened our immigration enforcement system and made the rapid deportation of criminals a priority. The other party, has repeatedly block sensible bi-partisan reforms which would strengthened our immigration enforcement system, and have passed additional legislation preventing DHS from continuing policies which have clearly made our border safer and immigration system far more focused on deporting murderers and not moms. If there is a national Party to blame for the tragic event in San Francisco it is far more the fault of the Republicans than the Democrats.

The national GOP’s effort to politicize the tragic shooting in San Francisco is an act of breathtaking and insulting cynicism. For a decade now they have blocked reforms and legislation designed to make incidents like this one far less likely. The new legislation being discussed to crack down on “Sanctuary Cities” will only make a terribly broken system worse, it will generate enormous political ill-will between local and federal law enforcement making the management of our entire national system far more difficult. These bills are hasty, political and ill-thought out. They will only make a serious national problem far worse and seemed far more designed to change the subject from Donald Trump’s recent attacks on legal, law abiding immigrants to the US than to solve a vexing national problem made far worse by their refusal to advance sensible reform over a decade of intense debate. 

If indeed the national Republican Party is serious about building on the extraordinary gains we’ve made in immigration enforcement in recent years, it can:

1) Pass comprehensive reform. HR15 introduced by the Democrats last year included the GOP’s Homeland Security Committee’s package of immigration enforcement provisions. CIR will help allow law enforcement and immigration courts to better target and more rapidly remove serious threats to public safety

2) Fully fund and support the post Morton era reforms by DHS, including the expansion of PEP. These reforms have already produced real results and improvements in border security and domestic enforcement.

3) Fund the Administration’s Central America proposal to help staunch the flow of unauthorized migrants from nearby El Salvador, Guatemala and Honduras. Last summer the House GOP deeply politicized the border crisis, and is now unwilling to follow through on sensible investments which will make future events like this far less likely while improving regional security and economic growth.

This latest focus on "Sanctuary Cities" is another disappointing episode in the GOP's decade long commitment on immigration reform to put politics over smart, sound solutions to a vexing national challenge. 

Study: Paul-Boxer "Invest in Transportation Act"

Today, NDN is proud to release a timely new study of the economic implications of the “Invest in Transportation Act” sponsored by Senator Rand Paul and Barbara Boxer. The study, “The Revenue And Economic Effects of the Paul Boxer Plan To Encourage the Repatriation of Foreign-Source Earnings by U.S. Multinational Corporations,” is co-authored by Dr. Robert Shapiro of NDN and the Georgetown Center for Business and Public Policy, and Dr. Aparna Mathur of the American Enterprise Institute. Their rigorous study predicts that the passage and implementation of the Paul-Boxer bill would provide substantial revenues for future highway and infrastructure investment, boost GDP growth and potentially create large numbers of new U.S. jobs.

A PDF version of the study can be found at the bottom of this post. 

The study analyzes extensive data from the 2004 Homeland Investment Act, the repatriation-related part of the American Job Creation Act of 2004, as a benchmark to project what would happen with the implementation of Paul-Boxer. Among the study’s main findings:

  • $1.45 trillion would be repatriated from foreign sources to the United States over the 5-year term of Paul-Boxer.
  • These huge repatriations would generate revenue gains totaling $68.9 billion over five years for the Highway Trust Fund. This addition $68.9 billion in infrastructure investment would generate between $138b and $172b in additional GDP.
  • The Paul-Boxer provision directing that 25% of repatriated funds must be used for specified purposes, including job creation and capital investment, would direct $350b over five years for those purposes, producing an additional $520b in GDP.
  • The $1.1 trillion in repatriated funds not subject to those requirements would generate at least $1.1 trillion in additional GDP.
  • All told, the GDP gains related to the bill would be sufficient to increase GDP by 1.7 percent per-year over the five years.
  • Based on past experience and the terms of Paul-Boxer, the additional funds used for job-related purposes --- hiring, wage increases, and training costs – could support the creation of millions of new jobs over five years.
  • The use of the funds repatriated under Paul-Boxer would generate additional revenues of some $63.4 billion over five years.

These findings are drawn directly from IRS data on what actually happened under the 2004 Homeland Investment , and directly challenge the way in the Joint Committee on Taxation has approached the repatriation of foreign source earnings. From the study’s conclusion:

“This study has analyzed the assumptions used by the JCT to produce those forecasts and tested them against the experience with the one instance in which Congress enacted a one-year tax incentive encouraging such repatriations, the Homeland Investment Act of 2004. The IRS data from that experiment are inconsistent with the JCT revenue estimates. The HIA induced U.S. multinationals to repatriate much greater foreign earnings than forecast by the JCT, including earnings eligible for the HIA's temporary deduction and earnings that did not qualify for the special tax incentives. As a result, the revenues gains during the term of the HIA were substantially greater than JCT had assumed. In addition, the IRS data showed that in the five years following the HIA, U.S. firms did not reduce their repatriations relative to the pre-HIA baseline, as JCT had assumed they would, but actually accelerated relative to the baseline. As a result, the revenue losses that JCT had assumed would occur once the HIA expired did not occur…..This analysis, based on all of the available data and other evidence, demonstrate that the JCT forecast of the revenue effects of Paul-Boxer is fundamentally flawed. The proposal would result in the injection of at least $1.45 trillion in additional resources for the U.S. economy, producing substantial revenue gains and economic benefits.”

It is our hope that this more accurate forecast of the economic and revenue effects of repatriated foreign source earnings of US multinationals will make the passage of a bipartisan, long term Highway Trust Fund bill more likely this year.

A Path Forward on Puerto Rico

Last summer, Rob Shapiro and I became alarmed at the economic news coming out of Puerto Rico and decided to do something about it. Over that summer and the following fall, we produced a series of papers and essays about the worsening fiscal and economic crisis there. We also briefed folks around town, including key advisors in the Obama Administration.

Due to the growing interest in these issues, we send along one of our essays from last year, an English language op-ed which ran on the Fusion website (it below and here). You can find a Spanish language companion here which ran on Univision’s site, and the full paper from Rob which we reference here. Rob is a recognized international expert in sovereign debt crises and has advised the IMF on Western Hemisphere economies. As people think about what to do next, we tried to look beyond the short-term, limited fiscal measures at hand, and towards a longer term strategy for the Island that can help reverse its current, economic “death spiral.”

Rob has also written on the economic situation in Greece, which you can find here.

"To Restore Prosperity, Puerto Rico Should Look to Ireland"

Submitted by Simon Rosenberg and Robert Shapiro on 9/17/14

How much longer will the people of Puerto Rico have to live with failed economic policies? It must be clear by now that the Commonwealth reliance on U.S. corporate tax preferences for U.S. companies locating operations there ran its course many years ago. Low tax rates matter to foreign investors, but it’s time for Puerto Rico to expand its horizons well beyond the United States. Rather, the Island should consider the example of Ireland, which a generation ago was the poorest member of the European Union (EU) – and became one of its most prosperous members by 2006.

In the late 1980s, Irish policy planners recognized that the fastest way to modernize their economy and turbo-charge productivity and growth was large-scale foreign direct investment (FDI). They also knew that with scores of middle-income countries vying for FDI, Ireland needed a comparative advantage. So they offered up Ireland as a low-wage, low-cost platform for multinationals from everywhere but Europe to enter the huge EU market. But they also had to make Ireland the most attractive place in the region for foreign investment. So in addition to the tax breaks that countries offered, the Irish government ramped up its public investments in modern infrastructure, they created 10 "enterprise zones" for foreign investors and equipped each zone with a new institution for advanced training and education, and they rolled out an array of special services and subsidies for foreign multinationals. The program even included helping foreign companies find the best locations and workers to meet their needs and providing relief from selected regulations and taxes for individual companies.

From 1987 to 2006, more than 1,000 multinational companies established new facilities in Ireland, including Microsoft, Dell, and Citicorp. The country’s real GDP grew at an average annual rate of 6.9 percent over that period, unemployment fell from 17 percent to 4 percent, the brain-drain of highly-educated young Irish was reversed, and the government’s debt as a share of GDP declined from 112 percent to 33 percent.

Like Ireland and the E.U., Puerto Rico and the mainland United States share a common currency, and virtually everything made in the Commonwealth enters U.S. markets without cumbersome customs and other import regulation. In short, Puerto Rico has a real opportunity to attract large-scale FDI from around the world by offering itself as a low-wage, low-cost platform for multinationals from Latin American, Asia and Europe to sell into the huge American market.

To succeed as Ireland did, Puerto Rico will have to undertake a comparable commitment to undertake difficult spending and tax reform, including targeted increases in public investments in education and infrastructure while still bringing down budget deficits. The Commonwealth government also must repair its tattered image with large foreign investors. To restore their confidence, Puerto Rico must step back from a possible debt default and from proposed changes in its bankruptcy laws to word off technical defaults by its public utilities. In this context, Puerto Rico also can ill-afford widely-publicized controversies that cast doubt on the Government’s commitment to keeps its word, such as current efforts by the Commonwealth Treasurer to negate its legal agreement to provide tax credits for tax over-payments to one of the Island’s major financial institutions, the Doral Financial Corporation.

The alternative is that the future for Puerto Ricans will look much like their present and recent past. After nearly a decade of stagnation and recession, the economy is 13 percent smaller than it was in 2004 – compared to Puerto Rico’s 13 Caribbean neighbors, which have averaged 2 percent annual GDP growth over the same period. That’s unsurprising. Business investment has grown in Puerto Rico at half the rate as elsewhere in the Caribbean. Capital flight has accelerated: foreign financial flows have been negative since 2006; and more recently, FDI flows turned negative as well. Unemployment is double the rate of the U.S. and nearly percent among the young, and the labor participation rate is the lowest in the Western Hemisphere. Moreover, public debt has soared from 66 percent of GNP to 96 percent, and both Moody’s and Standard & Poors rate the Commonwealth’s bonds as junk.

Here’s what ought to be the bottom line: While the per capita income of the Irish people increased from 60 percent of the EU average in 1987 to 136 percent of the average in 2003, per capita income in Puerto Rico today is seven percent less than it was in 2006. The choice – a hard road to long-term prosperity or the easy road to further decline – is Puerto Rico’s.
 

Issue/Agenda Path for GOP Hard to See – Some Thoughts on the Early 2016 Landscape

It is always a bit dangerous to extrapolate too much from a single poll, but findings in the new CNN/ORC poll if true and lasting are important for understanding the emerging 2016 landscape. The poll published earlier this week finds the approval of the President’s handling of the economy is now 52%, higher than his overall approval rating which stands at 50%. As CNN reports, this is the President’s highest rating on the economy in six years and may be the first time his approval rating on economic matters has been higher than his own personal approval rating. New consumer confidence data out yesterday shows a similar potentially structural jump in the public’s understanding of where the US economy is today (and it should be noted that these gains have come at the same time TPA was debated and passed once again challenging the conventional wisdom that advancing these trade agreements is bad politics).

Why is this so important? It speaks to where the GOP can go in 2016. Many commentators this past weekend dwelled on the anachronistic social agenda of the modern GOP and how it is likely to be a major drag for their party in 2016. This leaves the GOP candidate nominee more opportunity perhaps on the economy and security matters some suggested. But if Obama and Democrats are beginning to get credit now for turning the economy around, why would one elect a Republican in 2016? Particularly since this will have been the second consecutive Democratic Administration who had to turn things around from a GOP President whose policies brought us recessions and higher deficits? And the truth is the economy is far better now due to President Obama – tens of millions more are employed, tens of millions have gained health insurance, the annual deficit is a third of what it was in Bush’s last budget, the stock market is at historical highs, and there is a growing body of evidence showing that wages have begun to go up for the first time in fifteen years. Under this President and his policies the country is far better off, and the public is beginning to notice. And the projections for the next eighteen months suggest things are far more likely to get better than worse for the US economy.

Given all this it is just hard to see a way for the GOP to win the economic debate in 2016, particularly given that on fiscal matters – their supposed strong suit – the last two GOP Presidents have brought higher deficits while the last two Democratic Presidents have brought lower ones. Winning the economic argument in 2016 may be just as challenging for the GOP as winning on social issues. Democrats will be able to make a clear and convincing case that over the past generation it is just simply true that under Democratic Presidents the lives of everyday people have gotten better and under Republican Presidents they have gotten worse.

Thus, it is likely that the GOP is going to have count on winning the argument about who is best about keeping us safe as the cornerstone of their 2016 approach, an approach that worked well for them in 2014. Certainly there could be an opening for the GOP here. But my own view is that like the economy there is a lag in understanding of how much the President has achieved in foreign policy and security matters. He has pursued broad, strategic engagement in Europe and Asia, highlighted by his ambitious trade agreements in both regions. With his bold Cuba initiative, and other policies, relations with Latin America are strong and solid, and improving as was evidenced by the very warm event with President Rousseff of Brazil yesterday. The President has taken unprecedented steps to tackle global climate change, and his “all of the above” energy strategy has helped make the US far more energy and geopolitically independent. The US-Mexico border is far more secure than it was in the Bush era, and net undocumented migration into the US has gone from hundreds of thousands a year to zero. This President is helping rediscover the very best in the American foreign policy tradition, using all the tools in his tool box – economic sanctions, trade negotiations, traditional diplomacy and military might – to advance American interests abroad and make the world safer and more secure. Recent polling suggests the public likes this approach, and appreciates this President’s efforts to shape the course of history through more than just risky military conflict.

But what about the Middle East and terror? While President Obama may join the long line of American Presidents who struggled to improve things in the most challenging region of the world, the judgment of his strategic approach here still needs more time to settle on the ground and with the public. Much could change for the better, or the worse, in the next eighteen months. We don’t know how the Iran deal will turn out but at his point in his Presidency it would be ridiculous to dismiss these efforts as naive or ill thought through. But however the public will judge him next year it is hard to see how the simplistic belligerence of the modern GOP will either make the current global situation better, or their party popular with the American public skeptical of yet another American war in the Middle East. The last GOP President brought a series of foreign policy disasters for the US perhaps unparalleled in our history. And that legacy is likely to be as a big a drag in 2016 as any other the GOP faces no matter the record of President Obama next year.  So even this issue set is going to be hard for the GOP to prevail on next year. 

Finally, Hillary Clinton also seems prepared to open a new front which could end up being very advantageous to the Democrats in 2016 – political and governmental reform. As I have written elsewhere, this is an area of incredible opportunity for the center-left. What has become true in recent years is that there is one party which wants everyone to vote and to ease participation in our democracy, and one party which doesn’t. If fully developed this issue could become a powerful and meaningful new bludgeon for the Democrats in 2016, one making an already promising political landscape even more so.

So yes, it is early. And yes this is one poll. And yes much will change. But as we look ahead to 2016 a winning issue/agenda/argument path for the GOP is hard to see.  

In a long form magazine piece from a few years ago, I offered my own explanation for why the GOP is struggling so much with modernity, and been so unsuccessful in looking forward rather than back.

Update: Gallup reports a significant swing in Party ID towards the Democrats this quarter, providing further evidence of structural changes emerging in the 2016 landscape.  

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