All posts by Michael Shindler

US Army

Don’t Let Defense Wreck the Budget

Now that President Donald Trump is in office, the temptation to pass legislation to either raise or remove the spending caps established by the Budget Control Act of 2011 (BCA) is enormous, and Senator John McCain recently released a proposal that would do just that.

McCain’s proposal comes in response to claims that the American military has been neutered by the Obama administration’s inattention to proper funding. These claims have been a central part of the narrative employed not only by Trump during his campaign but also by rank-and-file legislators eager to demonstrate their commitment to a renewal of American strength and vitality.

The premise that underlies this crusade is deeply flawed. American military spending is already sizeable, and though the military’s footprint has declined, it remains strong. Repealing the BCA would unnecessarily boost military spending while leaving less funding available for other increasingly costly areas of the budget like healthcare, education, and infrastructure spending.

In 2011, a deeply divided Congress, in an effort to produce a legislative mechanism so grim that both parties would have no choice but to engage in bipartisan deficit reduction, passed the BCA. The bill was designed to trim a projected $984 billion from the budget over the next decade.

Read the rest at RealClearDefense…

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Trump should rein in the Export-Import Bank

Throughout his campaign, Donald Trump promised to revolutionize trade policy for the benefit of American workers and industry. He should begin by stopping the Export-Import Bank from purveying corporate welfare.

Ex-Im is a federal agency established to help American exporters by providing taxpayer-backed financing to governments and businesses in developing foreign markets without access to the necessary means to buy American products. In its youth, Ex-Im did just that and bolstered exports in the interwar period to Cuba, Haiti and Burma. Over the last 50 years, though, it has ventured far from its original purpose and has become a vehicle for ruinous market distortion.

According to the Mercatus Center, some of the largest beneficiaries of Ex-Im financing are companies like Boeing, Bechtel Power, General Electric and Caterpillar — all multinational conglomerates that could conceivably get financing directly from private lenders.

Continue reading at Washington Examiner.

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Could Social Security Still Survive? New Bill Attempts Reform Without Raising Taxes

Since January 1937, Americans have dutifully paid into Social Security trusting that its benefits will be there for them when they retire. Yet, that faith now seems unfounded with Social Security hemorrhaging cash. According to the latest report by Social Security’s Trustees, the program’s combined trust funds will be unable to deliver full benefits in 2034, forcing future beneficiaries to suffer a 21 percent benefit cut. In order for the program to survive, comprehensive reform is necessary.

Earlier this month, Rep. Sam Johnson (R-TX) introduced the Social Security Reform Act of 2016, a bill that aims to prevent the forecasted cuts by implementing a wide series of structural reforms to the program. According to the Social Security Administration’s Chief Actuary Stephen Goss, if the reforms outlined in the bill are implemented, “the combined OASI and DI Trust Funds would be fully solvent…throughout the 75-year projection period.”

There are no new ideas in this bill, nor does it aim to radically change the structure of Social Security. Rather, it’s a plan which would not involve raising taxes. In general terms, the plan outlined in the bill would affect Social Security in two ways: the mechanics of Social Security would be updated to account for modern economic conditions, and the program would further redirect funds towards poorer beneficiaries.

Continue reading at Townhall.

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Social Security Disability Insurance needs reform.

Roughly nine million Americans currently rely on Social Security Disability Insurance (SSDI). According to the latest annual report by the fund’s trustees, the program is set to be depleted by 2023, at which point it will only be able to pay 89 percent of current benefits.

In October 2015, Congress passed a temporary measure to ballast the SSDI program, allowing it access to about $150 billion in revenues over the next three years from Social Security’s Old-Age & Survivors Insurance (OASI) trust fund. Despite the transfer, the trustees reported that the SSDI program fails the test of short-term financial adequacy since its reserves will remain below its yearly costs over the next decade. And Since Social Security’s OASI program is even more beggared, continued revenue transfers are unviable.

Twenty-two years ago, when Congress similarly siphoned funds from the OASI program to supplement the SSDI program, Social Security’s Trustees cautioned Congress that it needed to reform the SSDI program or it would find itself similarly troubled in 2016. Instead of structural reform, the 114th Congress has employed the same unsustainable measures that were applied before. Yet now, the situation is fundamentally worse. The SSDI program still fails the Trustees’ test of short-term financial adequacy, and the program is expected to require another cash infusion in seven years’ time instead of twenty-two.

Worse yet, the number of SSDI beneficiaries has surged over the past 60 years since the program’s inception. In 1960, 0.5 percent of the working-age population received SSDI benefits. Yet, despite significant improvements in healthcare and technological advancements, the percentage of the working-age population that receive SSDI benefits has climbed to 5.1 percent as of 2014—an increase of over ten times.

Continue reading at The Hill.
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The Issue Trump Needs to be Talking About

During the first presidential debate, Donald Trump missed out on the perfect opportunity to address a giant problem stifling American prosperity.

A rising number of Americans are unable to start working without first getting a costly government license.  These licenses, commonly known as “occupational licenses,” shield license-necessary jobs from competition and reduce worker mobility.  Occupational licensing has become such a problem for American workers that it has led to calls for reform from both Republicans and Democrats – including  Hillary Clinton.  Yet throughout his campaign, Trump has not said a word on the matter.

In a new paper on the effects of occupational licensing from the Brookings Institution, Ryan Nunn writes, “Lower wages and higher unemployment rates for unlicensed workers, as well as reduced migration rates for those with licenses, all suggest that the social costs of licensing are larger than many have previously believed.”

A contributing factor to the growing “social costs of licensing” involves the costs that aspiring professionals must bear to get a license.  A study from the Institute for Justice examined 102 low- and median-income occupations requiring occupational licenses and found that on average, workers pay about $209 in fees and are required to undergo approximately nine months of training.

These onerous fees and mandatory training periods effectively raise the cost of entering a profession.  For poor Americans holding multiple low-wage jobs, struggling to pay their basic expenses, these mandatory costs diminish their chances of economic mobility.  And while occupational licenses for professionals such as health care providers and nuclear power plant technicians are understandable given concerns for consumer and public safety, many states require their residents to hold licenses to be pre-school teachers, cosmetologists, masseuses, and even hair-braiders.

Continue reading at American Thinker.