- 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.
On November 25, 2012, the New York Times unveiled a thoughtful series on the deficit, Debt Reckoning: The Fiscal Deadline in Washington. In "Study Questions Tax Breaks' Effect on Retirement Savings," economic policy reporter Annie Lowrey identifies the lopsided and ineffective tax breaks for retirement accounts as a major contributor:
"Every year, the federal government spends more than $110 billion on tax deductions to encourage Americans to save more for retirement. A new study suggests such provisions may have little effect on the amount Americans save." That's because they go to people who least need the help!
We agree that these tax breaks are ineffective in raising retirement savings and benefit the highest earning tax payers (read SCEPA's analysis of retirement tax expenditures). But instead of eliminating them, we should rearrange retirement tax deductions into a tax credit. This would allow every American to set aside money in a retirement account of his/her own. If we cut the retirement tax expenditure and merely use it to reduce the government debt, we will still face an overwhelming retirement income debt that will result in a retirement crisis (the gap between what Americans need for an adequate retirement and what they have is close to $6 trillion, according to Anthony Webb at Boston College's retirement Research Center).
America's debt crisis has forced Congress to re-evaluate and possibly reform the tax code. They should use this opportunity to restructure the tax code to solve the upcoming retirement crisis.
For further investigation into this topic, below is video of a forward-thinking event hosted by SCEPA and the New America Foundation in 2009 that asked academics and lobbyists to defend and critique three major tax breaks – those for retirement, housing and employee health care. You can also read Lauren Schmitz's analysis of the costs of these tax expenditures at the state level.
Willi Semmler, SCEPA Faculty Fellow and head of the Economics of Climate Change project, is working with Kewulay Kamara, a New School student working towards his PhD in economics, to raise funds to bring renewable energy to a school in Sierra Leone without electricity. The Dankawalie Secondary School (DSS), located in a the Dankawalie village, hopes to install solar panels on the school's library, which also serves as a resource for the entire community.
Solar-powered electricity will enhance the learning environment for the 150 students currently enrolled. The library will serve as a space for students who are unable to study at home. Having a study space allows children to succeed and focus on their school work. This is especially important for girls, who are often required to do household chores when they are home and are often not given time to study when they are home with their families.
For more information about the Dankwalie Secondary School, please visit: www.badenya.org.
With the recent passage of California legislation that creates retirement accounts for private workers, states are taking action to expand retirement security. SCEPA is working closely with state elected officials to support similar efforts across the country. Below is a summary of a new report on the policy, known as State GRA's.
STATE GUARANTEEDRETIREMENT ACCOUNTS: A Low-Cost, Secure Solution toAmerica’s Retirement Crisis
The share of workers without any retirement plan at work has risen dramatically over the past decade. The percentage of workers whose employer did not sponsor any type of retirement plan rose from 39 percent to 47 percent—a 21 percent increase. This alarming trend is a call to action for state and local policymakers who want to prevent old age hardship by ensuring all workers can invest adequately, efficiently, and safely for their own retirement.
We propose states offer all workers a voluntary, low-fee, low-risk, State Guaranteed Retirement Account (State GRA) to help boost savings for retirement. State GRAs are individual accounts where benefits at retirement are based solely on contributions and returns.
THE STATE GRA’S MAJOR FEATURES ARE:
Consistent contributions: as in a 401(k)-type plan, workers and/or their employers would contribute at least 3 percent of pay into their individual State GRA. Contributions could be channeled through the already-existing payroll deduction system, reducing administrative burden and minimizing costs.
Pooled investments: all individual account assets would be invested together in one large pool, with an emphasis on low-risk, long-term gains. Pooling takes advantage of economies of scale and minimizes financial risks.
Guaranteed returns: each account would be guaranteed to earn a return of at least 3 percent, or about 1 percent above inflation, protecting funds from the volatility of the stock market. Because funds are invested in longer-term assets as one large pool, the risk and costs associated with insuring the minimum guarantee would be negligible, and could be backed by private insurance contracts without posing any risk to the state or employers.
Portable accounts: Individual State GRAs would be portable; the account would automatically move with a worker from job to job.
Lifelong retirement income: at retirement, workers would convert all or part of their State GRA balance into an annuity—a guaranteed stream of income for life—to ensure that they do not outlive their savings.
Independent administration: a newly created independent board of trustees would oversee the plans’ operations. The board would assume all fiduciary responsibility for the fund’s investment decisions and administration.
Public investment management: costs could be minimized by using the already-existing public pension infrastructure to invest the funds. State pension funds operate on a not-for-profit basis and have highly skilled, professional investment managers and administrators that are charged with overseeing and investing more than $3.1 trillion in retirement savings. Assets in State GRAs would be kept in a separate investment pool from public pension fund assets.