Detroit Free Press

Senate Seat for Sale | Detroit Free Press

Communications — Sun, 14 Dec 2008 03:04:00 -0500

Christopher Hayes of The Nation magazine was interviewed on MSNBC’s Countdown with Keith Olbermann show last week and pointed out what he called “the ...

The Policies That Ruined the Auto Industry

Cecille Isidro — Mon, 01 Dec 2008 16:03:00 -0500

A lot of people are angry at the Detroit Three automakers, including many members of Congress. And why not?

GM, Ford and Chrysler seem still too bloated and old-fashioned, their workers too pampered. For too long the carmakers have failed to design and bring to market the smaller and more fuel efficient vehicles we now want to buy. Yet it is important to put the blame where it really belongs, not on management or labor, but on Congress.

Jacob Hacker in Detroit Free Press | 'Slipping Standard of Living Squeezes Middle Class'

Cecille Isidro — Sun, 12 Oct 2008 15:41:00 -0400

Rising living standards are part of the American story. Over the past century, the steady growth created the middle class, defused economic unrest and helped the nation absorb millions of working-class and immigrant families into the mainstream.

Against this backdrop, Jacob Hacker, a political scientist at the University of California at Berkeley who studies the risks facing Americans, says he sees a broad decline in the economic security of most Americans.

"The unemployment rate or the inflation rate doesn't capture the degree to which people are at risk of losing their home, or see their finances crumbling, or the risk of high health costs without insurance coverage, or the risk of retiring without adequate income," he says. LINK

Maya MacGuineas in Detroit Free Press | 'McCain, Obama Grapple for Advantage in Financial Turmoil'

Communications — Wed, 24 Sep 2008 15:17:00 -0400

On the "Today" show, Obama acknowledged he might have to phase in some parts of his program, though he later said that middle-class tax relief must occur, and quickly. Maya MacGuineas, with the Committee for a Responsible Federal Budget, said she thought Obama's suggestion that the economic problems could delay some of his program was a "very promising step for his campaign to make." LINK

Maya MacGuineas in Detroit Free Press | 'Voters Have Final Say on Two Brands of Change'

Communications — Thu, 11 Sep 2008 10:59:00 -0400

Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget -- and a McCain adviser in the 2000 election -- has heard lots of promises from both candidates for new initiatives and lower taxes.

What she hasn't heard enough of from either is what will be cut or what taxes will be raised to pay for new programs.

Her group looked at all promises both campaigns have made. The gap between promises and money to pay for them is more than $300 billion each.

MacGuineas said she believes both McCain and Obama could be bipartisan leaders, that both would make the tough choices. But she wishes she was hearing more about those inevitable choices now, instead of so much talk about change.

Otherwise, she said, "you can't be sure the messenger really means it." LINK

Len Nichols in Detroit Free Press | 'Healthcare Among Top Issues for Voters'

Communications — Mon, 05 May 2008 04:10:00 -0400

Full article

. . . Len Nichols of the Washington-based New America Foundation, a public policy institute, said at a panel discussion on health care in Washington last week: "If we could just agree to cover everyone, we could talk about how." . . .

Nichols said the quickest way to get Congress to create a Medicare-like plan for all is to suggest that big employers don't have to offer health insurance. In other words, workers wouldn't stand for it. . .

Detroit Free Press Quotes Reid Cramer on AutoSave

Communications — Sun, 10 Dec 2006 19:43:00 -0500

My Dad has never been much of one for giving advice, but one piece he offered many years ago stuck: Pay yourself first...

Pay yourself first is a short way of saying set some money aside every paycheck, before you start paying everyone else...

It is along those lines that Reid Cramer, a policy analyst and research director of the Asset Building Program at the nonpartisan New America Foundation, has been trying to get official Washington to listen to a new idea about the old virtue of thrift: "wise spending that creates greater wealth at a future time."

Cramer calls his concept AutoSave, and he says it is based on "behavioral economics" showing that simple, default savings plans work best. Direct deposits that put your cookie jar on autopilot.

In the AutoSave idea, 2% of pay would be moved by employers into a limited set of low-cost investment options specified by the employee. So after a year, an employee who makes $50,000 would have $1,000 set aside, plus the return on it. You could do that yourself, of course, but behavioral economists say you wouldn't and statistics show you don't.

The employee could get access to the money for any reason, but Cramer thinks… more

Maya MacGuineas Proposes Social Security Plan in Detroit Free Press

Communications — Mon, 04 Dec 2006 15:42:00 -0500

WASHINGTON -- Talks about Social Security will heat up in January when Democrats take majority control of Congress. But the discussion will be different from how it was in 2005, when President George W. Bush pushed for personal retirement savings accounts.

Momentum for that idea, which would have funded voluntary retirement savings accounts for younger workers by diverting a portion of current payroll taxes, died as Republicans in Congress failed to take up Bush's initiative amid opposition from a variety of groups, including Democrats...

One proposal getting lots of attention is a "little bit for everybody" plan that could form the basis of a successful bill, according to experts.

The so-called LMS plan is named for Jeffrey Liebman, a former aide to President Bill Clinton; Maya MacGuineas, a former adviser to Sen. John McCain, R-Ariz., and Andrew Samwick, former chief economist for Bush's Council of Economic Advisers.

After gathering dust for a year, the plan is generating new interest on Capitol Hill, said MacGuineas, director of fiscal policy programs at the New America Foundation...

The Social Security Administration's Office of the Actuary said the plan would eliminate Social Security's solvency gap over the next 75 years while maintaining benefits at relatively comparable levels for future… more

With Three Smart Steps, Congress Can Make a Big Difference

Cecille Isidro — Sun, 06 Nov 2005 00:00:00 -0500

I just paid off the last of my student loans. Today, I start saving for my children's college education, and I'm already behind. Like millions of Americans, by the time I retire, I will have spent over 75% of my life either paying or saving for college. It shouldn't be this hard.

The College Board recently reported that tuition and fees at public four-year colleges are up more than 37% in non-inflation-adjusted terms just since this year's senior class began college. At the current rate of tuition and fee increases, today's first-graders will be paying more than $341,000 for a four-year education at the University of Michigan at Ann Arbor by the time they reach college age. And that figure doesn't even include the cost of graduate school, which by then will be a prerequisite to joining the middle class. Michigan ranked third among the 50 states this fall, behind only Colorado and Kentucky, in the cost of tuition and fees at its public universities.

In the next several weeks, lawmakers in Washington will rewrite nearly all federal higher education law. There are three things Congress can and should do to help middle class families pay for college.

First, Congress can slow the growth in college tuition by conditioning future increases in federal financial aid on the maintenance of state funding for higher education. According to the U.S. Department of Education, the top driver of increased college tuition is declining state support for higher education,

Over the last four years, states have cut higher education funding, which accounts for about one-third of state spending, from an average of $6,874 per pupil to $5,721. Michigan has cut state support for higher education by $200 million over the last four years.

There is little incentive to stop these cuts, because they make it easy for state politicians to balance their budgets. The only consequence is for students, who face increased tuition and student loan debt.

Federal Medicaid, transportation, and elementary and secondary education funding are all conditioned on a state match. Increased federal funding for higher education should be conditioned on a state's maintaining, not cutting, its own fiscal effort on behalf of higher education as well. As a matter of course, Congress should stop states from balancing their budgets on the backs of college students.

Second, and without raising taxes a single penny, Washington can and should increase student financial aid. According to the Congressional Budget Office, Washington spends about $9 billion more each year than is necessary on student loan bank subsidies and middlemen. President George W. Bush's most recent budget called these bank subsidies "unnecessarily excessive" and proposed cutting them by $4.5 billion a year.

If Congress would accept President Bush's student loan bank subsidy cuts, it could give every college loan borrower over $500 more in extra grant aid each year--enough to cover the costs of books. If Congress went further and cut all the waste out of the student loan program, it could give every borrower more than $1,000 in additional grant aid each year.

Third, Washington should require every college to be candid about the full, four-year cost of going to college. Tuition increases fluctuate wildly from year to year, undermining family financial planning and increasing dropout rates. In 2002, U-M tuition and fees increased 7.9%. In 2003, they increased 6.5%. In 2004, they went up 15.9%. This year, tuition and fees are up 12.3%. Every Ann Arbor student knows that his or her tuition will go up from one year to the next, but this year's senior class had no idea that its tuition was going to increase some 38.7% since freshman year.

Public and private institutions of higher education should be required to set multi-year tuition and fee levels for each cohort of students at the beginning of each student's freshman year. Tuition costs can increase from one year to the next for individual students, but families should know at the time of enrollment how much of an increase they will confront on an annual basis. This is happening at Central Michigan University, which last summer approved a plan to raise freshman tuition 19% but with a guarantee that costs will remain the same for these students for five years.

These three simple steps--slowing the growth in tuition, increasing financial aid, and helping families plan for college cost increases--would make higher education more affordable and accessible for the middle class.

It hasn't happened to date, because too many politicians in Washington are afraid that if they condition federal financial aid on state action, they will be accused of hurting students. And they haven't cut the gross waste in the student loan program, because many of those same politicians are beholden to the banks reaping big profits on student loans. But ducking the college cost problem does a disservice to students and the country, and ducking waste in the student loan program does a disservice to taxpayers. Federal financial aid should help students and families, not state politicians and big banks.