|
Daily Policy Digest 12-01-2004
|
Julian Goh
|
Dec 02, 2004 01:44 PST
|
NATIONAL CENTER FOR POLICY ANALYSIS
DAILY POLICY DIGEST
12/1/2004
http://www.ncpa.org
------------------------------------------------------------------------
IN TODAY'S DIGEST
------------------------------------------------------------------------
o Policymakers should change the "defaults" in 401(k) plans in
favor of sound retirement preparation, say John C. Goodman and
Peter Orszag... NATIONAL CENTER FOR POLICY ANALYSIS/BROOKINGS
INSTITUTE
o Deficits in U.S. current accounts (trade and investments) reached
$546 billion in 2004, says Bruce Bartlett... NATIONAL CENTER FOR
POLICY ANALYSIS
o New accounting rules will cost Fortune 1000 companies an
estimated $6 billion this year, says Holman W. Jenkins Jr... WALL
STREET JOURNAL
o Rural African clinics are training people to treat common
illnesses, say observers... NEW YORK TIMES
o Affirmative Action hurts blacks entering law school, says law
professor Richard H. Sander... UNIVERSITY OF CALIFORNIA, LOS
ANGELES/STANFORD LAW REVIEW/ASHBROOK CENTER FOR PUBLIC AFFAIRS
------------------------------------------------------------------------
DAILY POLICY DIGEST
------------------------------------------------------------------------
------------------------------------------------------------------------
RETIREMENT SAVINGS REFORMS
------------------------------------------------------------------------
One of the most significant reforms policymakers could adopt to boost
voluntary retirement saving would be to change the "defaults" in 401(k)
plans in favor of sound retirement preparation, according to John C.
Goodman, president of the National Center for Policy Analysis, and Peter
Orszag, a senior fellow with the Brookings Institution.
To encourage the adoption of plans with features proven to be effective
in helping workers better prepare for retirement, policymakers should:
o Clarify that retirement savings plans with these features are
permissible under state labor laws.
o Require that, at least as a default, when employment ends,
employees' 401(k) accounts are automatically rolled over into
another qualified plan or into an IRA, or remain in the previous
employer's plan, rather than requiring a terminated employee to
take a potentially taxable (and penalized) distribution.
o Allow plans to disburse small account balances without penalty to
employees who decide to opt out soon after the automatic
enrollment begins.
Moreover, taxpayers who choose to direct deposit their income tax refund
should be allowed to split the refund between accounts. The IRS
currently does not allow refunds to be split. This significantly
reduces the portion of tax refunds that are saved, since many families
are reluctant to deposit their entire refund in a tax-preferred savings
account. This proposal would not require additional legislation.
American workers need savings plans that will adequately fund their
retirement and which provide flexibility, versatility and expanded
investment opportunities. These are keys to encouraging workers at all
income levels to invest in their future retirement, today, say Goodman
and Orszag.
Source: John C. Goodman and Peter R. Orszag, "Retirement Savings Reforms
on which the Left and the Right Can Agree," Brief Analysis No. 495,
December 1, 2004, National Center for Policy Analysis.
For text
http://www.ncpa.org/pub/ba/ba495/
For more on Retirement Savings
http://www.ncpa.org/iss/eco/
------------------------------------------------------------------------
TRADE DEFICIT COULD LEAD TO TAX INCREASE
------------------------------------------------------------------------
A significant tax increase is necessary to deal with the U.S. budget
deficit, says Bruce Bartlett. Sooner or later financial markets will
put pressure on Congress to act.
The root of the problem is the current U.S. account deficit, which
includes the trade balance for goods and services, plus receipts on U.S.
investments broad minus payments to foreigners on their investments
here. There is also a large negative figure for unilateral transfers
abroad, such as those for military programs and foreign aid, says
Bartlett.
o In 2003 the United States exported $713 billion worth of goods
and imported $1,261 billion, for a deficit of $548 billion; this
was partially offset by a significant surplus in the export of
services of $74 billion.
o U.S. companies also received more in income on their foreign
operations than we paid out to foreigners on their operations
here, giving us a surplus of $33 billion in this area.
o After subtracting $67 billion for unilateral transfers, we ended
up with a current account deficit of $531 billion.
Basically, this $531 billion figure has to be financed by foreigners who
are willing to invest in the United States directly or buy
dollar-denominated assets such as stocks and bonds. In 2003, foreigners
bought $829 billion worth of the latter, while Americans increased their
ownership of foreign financial assets by $283 billion. The difference,
$546 billion, approximately equals the current account deficit, says
Bruce Bartlett.
Source: Bruce Bartlett, "A Tax Increase is in the Forecast," National
Center for Policy Analysis, December 1, 2004.
For text
http://www.ncpa.org/edo/bb/2004/20041201bb.htm
For more on Federal Deficit
http://www.ncpa.org/pd/budget/budget.htm
------------------------------------------------------------------------
"SARBOX" SILLINESS
------------------------------------------------------------------------
Sarbanes-Oxley, the law which unanimously passed the Senate in 2002,
places substantial costs and burdens on public companies while
accountants profit, says Wall Street Journal business columnist Holman
W. Jenkins Jr.
Sarbanes-Oxley was designed to reduce investor risk by getting tough on
CEOs and public companies for alleged accounting irregularities.
However, no law, says Jenkins, can shield those who take the risk of
investing in speculative ventures. Furthermore, it does not address the
well-publicized behavior of CEOs.
According to Jenkins:
o Sarbanes Oxley (i.e. "sarbox"), will cost Fortune 1000 companies
an estimated $6 billion this year alone.
o Small start-up companies that wish to go public will have to
cough up an estimated $150,000 just for Sarbox paperwork.
o Audit fees for the average company have risen by 50 percent over
just one year.
o Companies must spend about at least $100,000 insuring their board
members.
o Late filers of financial reports to the Securities and Exchange
Commission doubled last quarter, topping about 600.
Furthermore, the benefits are accruing not to the investor class, but to
the "Big Four" accounting firms -- KPMG, PriceWaterhouseCoopers, Ernst &
Young and Deloitte & Touche. Besides the fact that Sarbox gives them
extensive power over corporations, they are expecting substantial
profits as well by year's end.
Source: Holman W. Jenkins Jr. "Thinking Outside the Sarbox," Wall Street
Journal, November 24, 2004.
For text (subscription required):
http://online.wsj.com/article/0,,SB110126342118582687-search,00.html
For more on Regulatory Issues: Compliance Costs
http://www.ncpa.org/iss/reg/
------------------------------------------------------------------------
AFRICA USES PARAPROFESSIONALS TO TREAT DISEASE
------------------------------------------------------------------------
In rural clinics across Africa, people are being trained to treat
common illnesses such as diarrhea, pneumonia and malaria, say observers.
While not physicians, these paraprofessionals offer a solution to the
brain drain of doctors to rich Western nations and more prosperous
African countries. According to health experts, Africa needs one
million more doctors and nurses in order to adequately address health
demands of the continent.
Poor countries like Ethiopia, Mozambique and Malawi are doubling the
small number of paraprofessionals they are training:
o In Mozambique, such health workers are already common in
operating rooms, performing tens of thousands of life-saving
surgical procedures.
o In Malawi, paraprofessionals are performing emergency Caesarean
sections.
These substitute doctors offer other advantages: they are much cheaper
to train and pay than licensed doctors; they are more willing to work in
rural areas; and they generally do not leave the country for greener
pastures, say observers.
Source: Celia W. Dugger, "Lacking Doctors, Africa Is Training
Substitutes," New York Times, November 23, 2004.
For text
http://www.nytimes.com/2004/11/23/international/africa/23ethiopia.html
For more on Medical Personnel
http://www.ncpa.org/iss/hea/
------------------------------------------------------------------------
AFFIRMATIVE ACTION IS AN IMPEDIMENT TO REAL ACHIEVEMENT FOR BLACKS
------------------------------------------------------------------------
Affirmative Action hurts blacks who are entering law school; in fact,
the number of black lawyers would increase without race-based
preferences, according to a study in the forthcoming issue of Stanford
Law Review.
University of California, Los Angeles (UCLA) law professor Richard H.
Sander examined the effects of affirmative action on the success of
black students in law school, finding:
o After one year, 51 percent of blacks in law school are in the
bottom 10th of their class.
o In 1991, only 45 percent of blacks entering law school pass the
bar exam on their first try, compared to 80 percent of white
students.
o If affirmative action was not in place, 74 percent of black
graduates would pass the bar exam the first time; furthermore,
the number of new black lawyers would rise by 8.8 percent.
The problem with affirmative action, he says, is that it promotes
students who are ill-prepared for the rigors of law school.
Lucas E. Morel of the Ashbrook Center notes that the achievement gap
between blacks and whites begins in primary grades and continues up
through college. Unless the nation's schools get serious about closing
the gap early on, the band-aid solution of Affirmative Action will do
little to benefit blacks.
Source: Lucas Morel, "The Disaffirmation of Black Law Students,"
Ashbrook Center for Public Affairs, November 2004.
For text:
http://www.ashbrook.org/publicat/oped/more/04/disaffirmation.html
For more on Affirmative Action in Education
http://www.ncpa.org/pd/affirm/affirm.html
------------------------------------------------------------------------
POLICY NOTES
------------------------------------------------------------------------
International pressure on the U.S. dollar could lead to decisive action
on the federal budget deficit, according to NCPA Senior Fellow Bruce
Bartlett's latest syndicated column, which could mean a temporary
reduction in stock prices and a rise in interest rates.
Feature Commentary:
Deficit Coming Due on Dollar?
http://www.washtimes.com/commentary/20041130-084446-4947r.htm
Other Selected Commentaries on the Deficit:
Dicey Deficit Algorithms
http://www.washtimes.com/commentary/20040907-095326-3196r.htm
Worrying about Deficits
http://www.townhall.com/columnists/brucebartlett/bb20040109.shtml
Deficit Politics
http://www.ncpa.org/edo/bb/2003/bb-20031112.html
Budget Deficits And Interest Rates
http://www.ncpa.org/edo/bb/2001/bb102201.html
NCPA Policy Digest Articles on the Federal Budget
http://www.ncpa.org/pd/budget/budget-4a.html
------------------------------------------------------------------------
National Center for Policy Analysis
"Making ideas change the world"
http://www.ncpa.org
This message is sent by us only to Daily Policy Digest subscribers.
If someone forwarded this message to you and you like what you see,
please subscribe to this list.
http://www.ncpa.org/sub/
Please do not reply to nc-@ncpa.org as it is not monitored. If you
have any problems or questions, please contact us through our website
at:
http://www.ncpa.org/contact.html
NCPA is a service mark of the National Center for Policy Analysis.
We are an independent public policy institute and are not affiliated
with any other organization, trade association or corporation.
------------------------------------------------------------------------
The NCPA is a 501(c)(3) nonprofit that relies completely on private
donations. Help us continue our work with a tax-deductible gift.
Visit https://secure.ncpa.org/support.html or call 972-386-6272.
Main office: 12770 Coit Rd. Suite 800 Dallas, Tx 75251
DC Office: 601 Pennsylvania Ave. NW Suite 900, South Building
Washington, DC 20004
------------------------------------------------------------------------
To forward this information to friends and family - click below:
http://subscribe.ncpa.org/members.aspx?Task=FF&SI=6137&E=julian_academic%40hotmail.com&S=1&N=250&Format=TEXT
To receive the HTML version of this Digest, click below:
http://subscribe.ncpa.org/members.aspx?Task=CH&SI=6137&E=julian_academic%40hotmail.com&S=1
To Unsubscribe from this distribution list, click below:
http://subscribe.ncpa.org/members.aspx?Task=OOS&SI=6137&E=julian_academic%40hotmail.com&S=1&NL=6
Copyright 2004 National Center for Policy Analysis
All rights reserved
|
|
 |
|
