- On Capitol Hill
- On Wall Street
- In the Press
- Policy Reform Work
Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
Two of today’s most contentious policy issues are income inequality and the future of Social Security. While often discussed separately, ReLab’s new working paper, “Reducing Inequality Through Social Security,” investigates if Social Security reform can help reduce inequality for all U.S. workers.
The paper, co-authored by Kyle Moore and Peter Arno, uses data from the Social Security Administration to determine that income inequality would experience a small reduction if Social Security reform includes both removing the maximum taxable earnings cap, the “salary cap,” and increasing the minimum benefit. This effect is due to ensuring that all workers pay the same percentage of their earnings into the program while providing increased support to those below the federal poverty level.
This research supports the need to focus not only on ensuring Social Security’s solvency for future generations, but also building the program’s ability to support all working Americans.
On August 14, 2016, Financial Times' reporter Alistair Gray describes consumer "fury" over insurance companies' efforts to increase premiums for long-term care, sometimes doubling the cost.
Consumers thought they were doing the right thing because Medicare, the government health insurance program for the elderly, does not cover the cost of long-term care. The cost of care exceeds the financial capacity of most elderly households. Many uninsured households end up impoverished and dependent on Medicaid, the government health insurance program for the indigent. These costs are a signficiant factor driving increases in Medicare expenditure.
Is private long-term care insurance a means of both providing financial security to the elderly and reining in Medicaid costs? The answer is "no," for three reasons.
First, more than a quarter of all households with long-term care insurance at age 65 lapse their policies prior to death. For these households, long-term care insurance is worse than useless. They pay premiums for many years, often receiving nothing in return. Worse, those who lapse are the households most likely to subsequently require care.
Second, for each dollar in premiums paid, only 60 to 70 cents is paid out in benefits. This is not because long-term care insurers are making big profits - they are not. The remaining 30-40 cents is eaten up by the high costs of doing business - employing actuaries, underwriters, paying sales commission, and so on. In contrast, administrative costs represent less than one percent of Social Security expenditures.
Third, private long-term care insurance doesn't achieve the basic purpose of any insurance, namely to transfer risks from the individual to the insurer. This is because insurers have the right to increase premiums if they are able to convince their state insurance regulator that they got their actuarial assumptions wrong. Although a household purchasing insurance reduces the risk posed by long-term care costs, it takes on an entirely new risk, namely that the insurer increase its premiums. Insurance may do little to reduce the household's overall risk exposure.
So why allow insurers to increase premiums? The policy justification is that if insurers were not permitted to increase premiums, they might exit the market, and worse, might become insolvent. But allowing insurers to increase premiums makes it impossible for households to evaluate the merits of purchasing coverage. The household has no idea whether the company quoting the lower premium really represents better value, and whether it would be better off not purchasing coverage at all. We are not convinced that a prohibition on premium increases would result in insurers refusing to offer coverage. But even if it did, we may be better off with no market at all than with a market characterized by high lapse rates, high administrative costs, and little effective risk transfer.
SCEPA is proud to congratulate New School Economics PhD Heather Boushey on her appointment as chief economist of Hillary Clinton’s transition team, formally called the Clinton-Kaine Transition Project.
Boushey serves as executive director and chief economist of the Washington Center for Equitable Growth and a senior fellow at the Center for American Progress. Previously, she worked at the Joint Economic Committee, the Center for Economic and Policy Research, and the Economic Policy Institute.
Her recent book, “Finding Time: The Economics of Work-Life Conflict,” reflects her research focus on inequality, women, and social policy. The book presents a history of how the social and political environment has shaped the complicated economic lives of families. In response, she lays out policy proposals necessary for Americans to find the time they need and businesses to attract productive workers. Boushey presented her findings at The New School as SCEPA’s 2016 annual Schwartz lecturer. She also joined us in 2014 to give a powerful response to Thomas Piketty’s presentation of his book, “Capital in the Twenty-First Century.”
Boushey received her PhD in Economics from The New School for Social Research in 1998. Working with Economics Professor Anwar Shaikh,her dissertation was titled, "The Social Structures of Insulation: The Relationship Among Unemployment, Discrimination and Social Policy."