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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.
Today’s New York Times summarizes Republican legislation to replace Obamacare as “cut[ting] back on financial assistance for relatively low-income insurance shoppers [while] offer[ing] new financial benefits for the upper-middle class and the rich.”
This description supports Harvard Professor Theda Skocpol’s assertion that ObamaCare and other U.S. health insurance programs are “at the heart of the politics of inequality.” In a presentation at The New School on February 6th titled, “Democrats, Republicans and the Explosive Politics of Health Insurance,” Skocpol argued that the Affordable Care Act (ACA) is the largest redistributive policy in recent history.
While the United States suffers from rapidly rising healthcare costs and a large and disproportionately poor uninsured population, the ACA reduced health care cost inflation by 2 percentage points (from 4% in 2010 to less than 2% in 2015) and decreased the level of those without health insurance by 7 percentage points (from 18% in 2013 to 11% in 2016).
Despite these positive outcomes, public consensus regarding the ACA is divided. The Kaiser Family Foundation Health Tracking Poll, conducted one week after Trump won office, found that 48% of people support repealing the ACA while 47% are opposed. However, some components of the ACA have majority support. More than 65% said that lowering health care costs should be a top priority for the new administration.
As for politics, Skocpol notes that Republican efforts are supported by a strong wave of conservative lobby groups, think tanks and activists while Democrats suffer from a lack of consistent and assertive mobilization in support of the ACA.
What will happen? Skocpol ended her remarks by saying, “Quiet evisceration will happen, even if overt total repeal does not.” However, in a sign of hope, she urged her fellow professors and members of think tanks and activists to express the urgency and importance of keeping healthcare affordable and accessible for all.
Lily Batchelder joined ReLab's Political Economy of Aging speaker series to present a lecture titled, "Improving Retirement Savings Choices Through Smart Defaults."
Americans are not saving enough for retirement. One of the most powerful levers for influencing retirement savings behavior is through defaults, but there have been relatively few reforms to leverage their influence within our voluntary retirement system over the past decade. Making defaults "smarter"-including adjusting defaults based on socioeconomic characteristics of savers-is a simple way that policymakers could dramatically improve retirement security at little cost to taxpayers. Professor Batchelder made the case for making defaults smarter, and the normative, legal, and practical challenges to such reforms.
Lily Batchelder is professor of law and public policy at NYU School of Law and an affiliated professor at the NYU Wagner School of Public Service. From 2010 to 2015, she was deputy director of the White House National Economic Council and deputy assistant to the President. Batchelder received an AB in Political Science from Stanford University, an MPP in Microeconomics and Human Services from Harvard's Kennedy School, and a JD from Yale Law School.
The Political Economy of Aging speaker series is a forum for academics and practitioners to share and engage in cutting edge research in social policy and the political economy of aging. The series is designed to forge interdisciplinary connections and examine how to progressively manage an aging society. The series is sponsored by SCEPA's Retirement Equity Lab, led by economists and retirement experts Teresa Ghilarducci and Tony Webb.
GOP-Controlled House Votes on Resolution to Undo Federal Regulations Supporting State Efforts to Provide Retirement Savings Accounts to Uncovered Workers
Today’s vote in the U.S. House of Representatives to overturn regulations supporting state efforts to provide retirement savings accounts to private sector workers risks denying retirement savings plans to 63 million workers without access to employer-based plans. This includes 23 million people who will lose coverage in the seven states that have enacted plans, including California, Connecticut, Illinois, Maryland, New Jersey, Oregon and Washington, and 40 million people who will lose coverage in the 28 states that are considering similar legislation.
“If Republicans succeed in rolling back DOL regulations, they will destroy the best chance 63 million American workers have of getting access to a retirement plan,” said Teresa Ghilarducci, director of the Retirement Equity Lab (ReLab) at The New School. “These states took the responsible first step to save their residents from a retirement crisis defined by low coverage and inadequate savings and protect their taxpayers from the fiscal crisis resulting from millions of indigent elderly. This would be a painful step backwards for the millions who are shut out from the dwindling number of employer-sponsored plans.”
According to ReLab’s calculations using the U.S. Census Bureau’s Community Population Survey, of the 161 million workers in the United States, over half - 54.2% or 87 million workers - do not have access to a retirement plan at work.
The U.S. House of Representatives is set to vote today on a Republican-sponsored Congressional Review Act resolution to overturn the Department of Labor’s final rule, “Savings Arrangements Established by States for Non-Governmental Employees,” that provides legal support to city and states who have either enacted or are considering plans to provide retirement accounts to private sector employees who are not offered a plan through their employer. The regulations clarify and define the ability of states and certain cities to enact plans in coordination with the federal law known as ERISA (the Employee Retirement Income Security Act of 1974). ERISA provides federal protections for workers participating in most retirement and pension plans sponsored by private employers. Without this support, state plans will be left with legal uncertainties that could prevent implementation or enactment of state-administered IRA accounts for uncovered private workers.
“Evidence has shown again and again that access to employer-sponsored plans is the linchpin of retirement security. Without workplace plans, people simply don’t save enough to support themselves in retirement,” said Ghilarducci. “The breathtaking pace of state efforts to increase coverage reflects the political will to address a need that is not being met in the private market. Few workers without access to an employer-sponsored plan invest in an IRA, many of which come with high fees. In contrast, state plans will default uncovered workers into low-cost, state-administered IRAs.”
Since 2011, 35 states have proposed or enacted retirement reform to provide private sector workers access to retirement savings accounts. State plans, also known as Secure Choice Plans or SCPs, are state-level retirement plans designed to provide retirement savings accounts to private sector workers who do not have access to such a plan at work. Under SCPs, designated private-sector employers are required to automatically deduct a percentage of their workers’ pay and forward it to state-sponsored individual retirement accounts (IRAs). Accounts are individually owned and professionally managed administered by independent boards headed by state-appointed trustees. Under these plans, employees would have the right to change their contribution rates or opt out of making contributions.