As U.S. policymakers weigh efforts to improve the quality and accessibility of child care services, many have looked to France as an example of where we might go next. Pascal-Emanuel Gobry points to some of the limitations of the French model, and the various ways in which it might not meet American tastes and needs:

1. France’s publicly-financed day care centers are well-regarded, and one result is that demand outstrips supply. Spaces are, according to Pascal, allocated in part out of favoritism, e.g., one is more likely to secure a place if one has a longstanding relationship with a public official charged with making admissions decisions. Pascal suggests that differences in the political cultures of France and the U.S. make it unlikely that the U.S. could match French success with regards to publicly-financed day care centers, let alone exceed it, e.g., the U.S. is a more litigious and diverse society than France, and Americans are less amenable to government intervention and spending. The implication is that an American effort to draw on the French approach would either be far more expensive (to deal with the cost of lawsuits, to address the needs of a more diverse population) or of lower-quality.

2. One of the reasons why the cost of France’s publicly-financed day care centers has proven manageable is that the ratio of children to caregivers is twice as high as it is in U.S. day care centers. This reflects French norms around caregiving that differ markedly from those that prevail in the U.S. Assuming U.S. parents pressed for lower ratios of caregivers to children, as they have pressed for lower student-teacher ratios in K-12 schools, the costs associated with day care centers would increase considerably, particularly if the goal is to secure well-trained personnel.

3. The baseline entry requirement for French child care workers is a “CAP,” a secondary vocational diploma. Though CAP recipients have far more specialized training in caregiving than U.S. high school graduates, the CAP is routinely awarded to 17-year-olds. Assuming U.S. parents insisted that child care workers had the equivalent of a community college or bachelor’s degree to work in publicly-financed day care centers, the associated costs would (again) increase.

Yet Pascal concludes by acknowledging that while the French model would be very difficult to export to U.S., there is at least one thing that U.S. policymakers can learn from the French: there is a broad consensus that it is right and appropriate for government to ease burdens on parents, as parents make an investment in the future labor market. 

1. Gov. Christie would be well-advised to embrace the ambitious but surprisingly cost-effective idea of extending New York city’s 7 subway line to New Jersey.

2. Matthew O’Brien of The Atlantic describes the formidable barriers facing the long-term unemployed as they try to re-enter the labor market.

3. In an otherwise excellent article on how marriage rates shape political outcomes, Jonathan Last of The Weekly Standard makes one misstep: he claims that increasing density has the effect of making homes more expensive. Yet he goes on to suggest that a good way to reduce home prices is to remove land-use restrictions. He was right the second time — removing land-use restrictions, including restrictions on density, is the best way to reduce home prices. This means allowing suburban homeowners to rent out accessory dwellings, yet it also means allowing for more construction in dense urban cores. What Last calls a “dogmatic commitment to increasing population density” among Democrats is an illusion, as those of us who live in monolithically Democratic cities can New York city and Washington, D.C. can attest: local activists are generally keen to restrict development, to impose rent control and rent stabilization, and to resist gentrification, which, ironically enough, is largely driven by restrictions on development and density.

In “Revisiting the High Tax Rates of the 1950s,” Arpit Gupta, a doctoral candidate in finance and economics at Columbia University and a regular contributor to The Agenda, delves into the historical findings of Thomas Piketty and Emmanuel Saez, two economists at the University of California at Berkeley who have observed that the tax burden on high-earners has declined dramatically over the past sixty years. Lawrence Mone of the Manhattan Institute summarizes Arpit’s core findings in a new Wall Street Journal op-ed. My hope is that Piketty and Saez will write a response to Arpit, as he raises a number of interesting issues.

Piketty and Saez observe that while average income-tax rates across income quintiles remained fairly stable from 1960 to 2004, the corporate income tax and estate tax burdens declined significantly over this period. The eye-catching 91 percent top marginal tax rate that was in effect at the start of that period only impacted households with income of $3 million or more in today’s dollars, a trivially small number of earners at the time, and so the average individual income-tax rate at the top of the income distribution was 31 percent — higher than the 24 percent average individual income-tax rate in 2004, but not dramatically so. Low rates on realized capital gains and deductions for interest payments and charitable deductions did a great deal to reduce taxes for high-earners in midcentury America. So the Piketty and Saez thesis that the tax burden on the high-earners has declined dramatically rests in large part on the notion that the entire burden of high corporate income taxes fell on the owners of capital.

Consider the prototypical American company of the 1950s, General Motors (subject of the famous 1953 remark by its chief executive, “What is good for the country is good for General Motors, and what’s good for General Motors is good for the country”). For GM, as for other major firms, taxable corporate earnings were substantial during the 1950s and 1960s (indeed, taxable corporate earnings averaged 9 percent of GDP in the 1960s). Therefore corporate taxes were a substantial stream of revenue for the federal government.

In accounting for the economic consequences of corporate taxation, Piketty and Saez assumed that the entire burden of these corporate taxes fell on stockholders in the form of lower returns. To calculate the era’s effective tax rates, they compute the total amount of corporate taxes and divide by all the income that shareholders made by selling shares—the realized capital gains in stock. Since stocks were predominantly held by wealthy individuals, Piketty and Saez estimate that the overall tax burden on the extremely rich was high. This is how they arrive at the 70 percent figure touted by Krugman and other advocates of higher taxes today.

And so a problem arises if we assume that at least some of the burden of high corporate income taxes falls on employees in the form of lower wages. Arpit makes a number of other points in his paper, e.g., the fact that high corporate earnings in the 1950s were to some extent a byproduct of a less competitive domestic and global economic environment, and so it is unlikely that we could painlessly raise corporate income taxes to 1950s levels. Achieving the effective tax burden on high earners that Piketty and Saez claim had been in place in the 1950s would instead require a sharp increase in taxes on ordinary income, an increase that wouldn’t necessarily yield hoped-for revenue gains.

Like state governments across the country, Rhode Island is struggling to meet the soaring cost of public-employee-pension liabilities while continuing to provide high-quality public services. Rhode Island has never topped lists of America’s most efficient state governments, yet it does have strong and influential public-employee unions that have been tenacious in defending the interests of their members in securing generous pensions and benefits.

But in recent years, the collapse of several local pension systems made the issue an urgent priority for Rhode Island taxpayers. Gina Raimondo, the Democratic state treasurer, spearheaded a sweeping effort to shift from defined-benefit pensions to more modest hybrid plans and to temporarily suspend cost-of-living adjustments. Raimondo’s reforms proved successful in large part because she devoted months to making the case in cities and towns across the state, convincing voters and even some public workers that containing pension liabilities was essential to protecting or expanding core public services. As Raimondo told Allysia Finley of the Wall Street Journal, her reply to social workers who asked her why they ought to care about pensions was that “if you don’t, your whatever it is, homeless shelter, is going to lose X thousand of dollars of funding.”

By all accounts, Raimondo is keen to run for the Democratic gubernatorial nomination in 2014, a prospect that has been welcomed by reform-minded Democrats across the country. The danger for Raimondo is that, having attracted praise for pension-reform efforts from the Wall Street Journal, she is seen by many public workers in the state as a menace and a traitor. This has redounded to the benefit of Angel Taveras, the mayor of Providence.

Like most Rhode Island municipalities, Providence faces staggering public-employee pension liabilities, and Chapter 9 bankruptcy looked almost inevitable as recently as a year ago. Now, however, Taveras has reached an agreement, approved by a Superior Court judge earlier this month, that will achieve sizable pension savings. Ted Nesi of WPRI describes the settlement in detail, and he warns that, while the savings are significant, pension contributions are still expected to rise robustly with each passing year. Taveras’s settlement caps total pension payouts, but a number of current retirees will continue to receive extremely generous pensions. One could argue that Providence might have been better off going bankrupt, as it would allow the city to sharply reduce these pensions, creating more breathing room in the city budget. Taveras’s approach represents a kind of middle way, in which retirees accepted a modest measure of sacrifice to prevent the much bigger sacrifice that would have likely followed bankruptcy. This has won him the enthusiastic support of public workers in Providence and across Rhode Island.

So, as Josh Kraushaar observes in National Journal, Rhode Island Democrats will have an intriguing choice in next year’s gubernatorial primary: On the one hand, there is the centrist Raimondo, a champion of public-sector efficiency and spending discipline; on the other there is the more vocally progressive Taveras, who commands the allegiance of Latinos and union members. Interestingly, Raimondo and Taveras are both Harvard alumni from working-class backgrounds, yet Kraushaar suggests that Taveras is seen as the “downscale” candidate while Raimondo is seen as the “upscale” candidate. One assumes that the two Democrats will clash on a range of issues, perhaps including charter schools and tenure reform. This will be a very fun race to watch. 

My latest column for Reuters Opinion is on New York City’s upcoming mayoral election, and the dismal fact that none of the leading Democratic candidates are equipped to deal with the city’s looming fiscal and economic challenges. 

Having been persuaded by Andrew Biggs that Congress should reject chained CPI as the basis for setting Social Security cost-of-living adjustments and personal-income-tax brackets, I’m disappointed but not surprised by the news that Republican lawmakers, including House speaker John Boehner, appear to have embraced the proposal. The Obama administration maintains that it intends to protect older beneficiaries from the cumulative impact of chained CPI, which is a good thing. Yet we don’t have a clear sense of exactly how the White House intends to achieve this goal. And so I think there is a strong case for broadening rather than narrowing the Social Security–reform conversation, to include more progressive benefit reductions or a larger effort to improve work incentives and establish a mandatory savings component.

Mark Thoma seems convinced that Biggs and his allies are insincere, and he betrays a lack of familiarity with arguments Biggs has made about Social Security for several years now. (Biggs has a forthcoming book on the subject, and he has published a short primer outlining his views.)

Specifically, Thoma maintains that NRO’s decision to publish a critique of chained CPI flows from a cynical desire on the part of conservatives “to position themselves as defending the elderly and the working class as they pursue their real goal of keeping taxes from increasing.” But of course Biggs is not a political strategist, and NRO does not set GOP policy. Those who do set GOP policy, and who have the most “skin in the game” when it comes to political outcomes, are members of the Republican congressional leadership, who appear to be united in support of chained CPI. So any cynicism on the part of NRO has proven, alas, fairly inconsequential.

And if we want to remain in the universe of purely cynical explanations — I’m comfortable swimming in those waters — a more plausible and sophisticated explanation for why some conservatives object to chained CPI could be that the Republican electoral coalition disproportionately consists of retirees and near-retirees, and it also relies heavily on non-college-educated white voters. Defending the interests of the elderly and the working class thus makes sense in narrowly political terms for Republicans, thus explaining the Republican reluctance to bring forward the timetable for Medicare competitive bidding and other measures designed to restrain the growth of old-age entitlements. The trouble, of course, is that Biggs tends to favor implementing structural reform of Medicare sooner rather than later, as do most NRO editors. Even if Thoma embraced this more sophisticated critique, he’d be wrong about Biggs and NRO more broadly. But this notion that Republicans are more attuned to interests of the elderly than the non-elderly poor accounts for more of the facts, e.g., the contrast between Republican enthusiasm for aggressive reductions in the growth of Medicaid expenditures and Republican caution on Medicare and Social Security.

One of Shikha Dalmia’s central arguments regarding less-skilled immigrants and means-tested benefits, as I understand her column, is that because the utilization of means-tested benefits among less-skilled immigrants is lower than it is among native-born citizens earning similar outcomes, which as we’ve discussed is almost certainly true, it is foolish to be concerned among the prospect that less-skilled immigrants will become public charges. Andrew Biggs raises the following concern:

Presumably we don’t like it when the native born are poor (and not simply because they use more welfare) and we have educational and training policies designed to bring the poor out of that state. So it seems wrong to compare the welfare utilization rates of people we choose to allow into the country with those the native born we consider to be unfortunate cases that we seek to prevent. A better comparison would be to the average American, although even then it’s not clear why we shouldn’t have a higher standard.

Biggs makes a closely related point at AEI Ideas:

According to the Congressional Budget Office, “In 2009, 29 percent of the foreign-born population between the ages of 25 and 64 had not completed high school or received a GED, compared with about 8 percent of the native-born population.” At the same time, the federal government, states, and localities spend billions each year trying to prevent US schools from graduating students with precisely these low levels of educational attainment.

So the types of workers we don’t want US schools to produce are precisely the type the American economy needs more of? I can see how we could use more highly-educated workers, but more people with 8th grade educations?

One could argue that Americans ought to be less concerned about raising graduation and college completion rates, as U.S. firms, in the agricultural sector but also in low-end services, have a significant appetite for low-wage labor. And if the utilization of means-tested benefits is our concern rather than the persistence of poverty, we could simply eliminate means-tested benefits for the native-born poor, as many libertarians and conservatives who favor a substantial increase in less-skilled immigration suggest we do for less-skilled immigrants. I think many of us find this idea discomfiting, and for good reason.

The goal of means-tested benefits and publicly-funded human capital investment is to better the lives of all members of the American polity, but particularly the most vulnerable, by giving them a foundation for participation in our shared economic and civic life. We might disagree about how much we ought to spend and how these programs are structured, with people like me favoring a limited scope for social programs, choice and competition, and an emphasis on work supports, etc., but support for the idea of a safety net and a place for the public sector in education is pretty firmly entrenched. When we expand the American polity, it makes intuitive sense that we would want to do so by welcoming individuals who are already well-prepared to fully participate in economic and civic life, as we’ve learned through long experience that people who are ill-prepared will face tremendous difficulties, as will their children. For a variety of reasons, individuals with 8th grade education and limited English proficiency are less likely to flourish in the U.S. than individuals with a college education and a high degree of English proficiency. If it is also true that less-skilled and less-affluent U.S. residents with limited English proficiency benefit more from an influx of skilled immigrants (potential customers or complements) than from an influx of less-skilled immigrants with limited English proficiency (potential competitors), the case for a more selective, skills-based immigration policy becomes even stronger. 

Another concern is that the path of assimilation is not as smooth of the descendants of less-skilled immigrants as it is for the descendants of skilled immigrants, as Jason Richwine’s analysis of the gap between second and third-generation Hispanic Americans suggests. 

In making the case against adopting chained CPI for Social Security and the federal income tax, Andrew Biggs notes the following:

1. Annual cost-of-living adjustments (COLAs) for Social Security help counteract the fact that private pensions are not adjusted for inflation.

2. COLA reductions fall hardest on the oldest Social Security beneficiaries, who are also the most at risk of poverty.

3. If we reduced the initial benefit but pegged COLAs to wage growth, which tends to outpace inflation by 1 percent per annum, we could achieve a spending reduction of similar or greater magnitude while protecting the interests of the oldest and most vulnerable beneficiaries.

4. And though chained CPI has the undesirable feature of sharply reducing benefits for the oldest and most vulnerable beneficiaries, it does relatively little to address the work and fertility disincentives embedded in the Social Security program, which are the much bigger long-term concern.

5. Moreover, applying chained CPI to federal income tax brackets represents a substantial tax increase. While personal-income tax revenues have been in the neighborhood of 8.2 percent of GDP in recent years, chained CPI would increase this share by 2.6 percentage points. The bulk of this revenue increase (69 percent) will be borne by taxpayers earning less than $100,000, according to the Congressional Joint Committee on Taxation. This is despite the fact that these households account for 28 percent of personal-income tax revenues. 

6. Biggs proposes indexing personal-income tax brackets to income growth. This would help keep tax revenues stable as a share of GDP unless lawmakers explicitly propose a tax increase. 

Essentially, the Obama administration is characterizing a significant tax increase on middle-income households as a concession to Republicans by linking it to a reduction in Social Security benefits that does not actually help the program become sustainable. The congressional GOP shouldn’t go for it. The problem, however, is that the failure of congressional Republicans to advance a more ambitious Social Security reform agenda — the kind that would actually benefit Social Security beneficiaries over the long term by introducing a pre-funded savings component and a stronger minimum benefit that would increase retirement incomes — has left them with limited options in countering the chained CPI proposal.

David Brooks’ latest column calls for a new bargain between right and left:

In this framework, Democrats would get a lot of the good ideas that are in the Obama budget, but they’d be bigger and more aggressive. We’d take the pre-k initiative, the spending on scientific research and the infrastructure spending. But then we’d throw on top other programs. Make more men marriageable (by helping them earn a reliable wage). Rebind the social fabric in atomized communities (social entrepreneurship funds). Maybe expand a national service program to give more young adults discipline, orientation and connections.

Republicans would get structural entitlement reform. Here, too, we could build on the ideas in the Obama budget, like chained Consumer Price Index for Social Security and the expansion of means-testing for Medicare. Then we could throw on other modest structural reforms: Combine Medicare Parts A and B and further limiting Medigap plans in order to induce seniors to make more cost-conscious decisions. Repair federal pensions and the disability system. Means test Social Security and raise the Medicare eligibility age for affluent workers.

This deal wouldn’t represent the moderation of the mushy middle. It would represent muscular moderation that is bold on both ends. Persuade majorities that discretionary spending is not just foreign aid and earmarks. It’s the government’s best shot at boosting social mobility. Remind Americans that their country can’t be a rising nation if we have an entitlements system fit for an aging and declining one.

Right now, we’re stuck in a political debate in which a federal government that spends, say, 24 percent of GDP represents tyranny while a federal government that spends 19 percent of GDP represents a free society, irrespective of state and local expenditures, tax expenditures, off-balance-sheet activities, and the cost of regulatory initiatives. The end result is that we have endless debates over spending levels while ignoring, for example, the shadow nationalization of the mortgage market and the perverse buck-passing dynamic created by cooperative federalism programs that fuels the growth of state and local government.

All other things being equal, I’d prefer a federal government that spends less rather than more, but not if it means that the federal government instead uses credit guarantees to expand its influence, or that it will use some combination of bribes and mandates to compel state and local governments to implement programs dreamed up in Congress. If our goal is to allow civil society to flourish, we ought to focus more on the scope of government and not just its scale. This is an argument Peter Berkowitz makes very effectively in Constitutional Conservatism:

Constitutional conservatism well understood does not mandate particular policies or command specific laws, but it does bring into focus the overarching aims and larger considerations that, in a free society, should inform policy and underlie law. It insists that federal laws and government programs involve a legitimate exercise of a constitutionally-grounded government power. It emphasizes that government initiatives and actions must promote and not weaken self-reliance, personal responsibility, industriousness, innovation, thrift, and the other virtues of liberty. It supports government undertakings that invigorate families, neighborhoods, voluntary associations, and religious communities while opposing government undertakings that enervate them. And it seeks to reduce the tasks performed by the federal government that, although in the federal purview, would confer greater public benefits if performed by more local forms of government, civil society, or the private sector.

That there is a meaningful distinction between government undertakings that invigorate civil society and those that enervate is a fact that merits close attention. Despite a decline in violent crime over the past two decades, violent crime levels in the U.S. remain far higher than they had been at midcentury, and far higher than they are in other advanced market democracies. Spending more and more effectively to reduce violent crime is a perfect example of a government undertaking that invigorates neighborhoods. The same goes for measures like the earned income tax credit that are designed to boost labor force participation, and thus help individuals build the skills they will need to eventually achieve economic independence. When conservatives turn against programs like the EITC on the grounds that it is an expensive transfer, they neglect the important fact that it is a transfer that socializes poor individuals, many of whom were raised in disrupted households without parents who worked steadily in the formal economy, into the world of work, and in doing so generates substantial spillover benefits. 

My disagreement with David, and it’s a small one, is that while I’m comfortable with a federal government that does more and spends more to see to it than poor individuals can find work (a goal that might entail nominal output targeting and wage subsidies, etc.), I do think it’s important to limit the scope of the federal government, as Berkowitz suggests. And so I’d be more inclined to devolve authority over early childhood investment and surface transportation to state governments, among other things. It is also true, however, that while increases in entitlement spending are hard to reverse, increases in discretionary spending might be somewhat easier to rollback, so shifting from the former to the latter might give national policymakers more flexibility. That’s no small thing. 

Rep. Greg Walden (R-OR), chairman of the National Republican Congressional Committee, has declared his opposition to chained CPI to reduce the growth in Social Security benefits on the grounds that doing so is tantamount to “trying to balance this budget on the backs of seniors,” as he said to Wolf Blitzer of CNN. It is easy to see why many conservative groups, included the Club for Growth, have forcefully objected to Walden’s characterization of chained CPI. If a measure that reduces the rate of growth in Social Security payments over the next decade represents an effort to “balance this budget on the backs of seniors,” one assumes it is just as reasonable to characterize the House-passed fiscal year 2014 budget as an effort to “balance this budget on the backs of Medicaid beneficiaries,” in light of the tight cap on the growth of its Medicaid block grants. Had Walden objected to chained CPI and the Ryan Medicaid proposal, one could say in his defense that he was being entirely consistent. But as it stands, Walden is reinforcing the narrative that while Republican lawmakers are devoted to protecting the interests of retirees and near-retirees, they are not nearly as interested in protecting the interests of younger low-income adults and children. 

To be sure, there is a strong case for Medicaid block grants or per capita caps, but embracing this kind of “architectural” Medicaid reform doesn’t necessarily entail agreeing to deep cuts in the rate of spending growth that would likely engender a backlash from governors of both parties and voters. So in this regard, at least, Walden’s remarks on Social Security betray a blind spot that is not uncommon in the House GOP.

This doesn’t change the fact that the case against using chained CPI to set Social Security benefits is actually quite strong, as Andrew Biggs of the American Enterprise Institute has recently argued:

I have no disagreement that, in general, the chain weighted CPI is a superior measure of inflation to the standard CPI-W used to calculate COLAs or the CPI-U used to index the income tax brackets. However, the chained CPI is the wrong measure for Social Security benefits and the income tax code. A better measure for Social Security would be a chain weighted version of the CPI-E, which measures price changes for individuals over 65. This probably would still show lower inflation than the current CPI, by around 0.1 percentage point annually, but would be superior to the current CPI-W, the chained CPI, or the CPI-E on its own (which tends to show higher inflation).

Call me crazy, but I’m guessing that Walden’s critique of chained CPI isn’t quite as sophisticated as Biggs’. But a debate over chained CPI among Republicans could yield a better, smarter Social Security reform proposal. Private retirement savings are proving inadequate to meet the challenge of increasing life expectancy; the Social Security system punishes long work lives; and the Social Security payroll tax appears to reduce fertility, which is problematic for any pay-as-you-go social insurance system. The conservative goal for Social Security shouldn’t just be reducing Social Security expenditures. Rather, it should be leveraging Social Security to raise incomes for older Americans, including low lifetime earners. As I argued earlier this month, there is a clear way forward that’s been articulated by Biggs and other Social Security reform advocates: transform the core part of Social Security into a universal flat benefit; create a new pre-funded mandatory savings component; and reform Social Security Disability Insurance by adding a new front-end of mandatory private disability insurance (PDI), as proposed by David Autor and Mark Duggan. The end result will be a system that is more fiscally sustainable, yet it will also be a system that does a better job of meeting the needs of retirees. 

Social Security isn’t just a budget problem. It is the foundation of retirement security for a large majority of older Americans. The only way advocates of entitlement reform can gain real credibility with voters is if they are committed to actually making the program work better. There is no reason to believe that chained CPI would actually improve the Social Security system, whereas measures like rewarding workers for extending labor force participation, as Biggs and Jed Graham have proposed, among others, would represent real structural improvements that would yield benefits well beyond the 10-year budget window. We need to combine sticks with carrots, e.g., if we call for trimming benefits for the earliest retirees, we should also call for cutting or eliminating Social Security payroll taxes for workers over the age of 62. 

Again and again, a narrow focus on the 10-year budget window is leading us to miss the forest for the trees. It’s a trap. 

One of the main ways the Obama administration proposes to raise tax revenue in its fiscal year 2014 budget is by imposing a 28 percent cap on the value of itemized deductions, a measure that is expected to raise $529 billion over the next decade. The president and his allies have been touting this approach, which also appeared in the Obama administration fiscal year 2013 budget, for some time, as it raises taxes on high-earners while preserving a marginal incentive to donate to charity. In 2011, Thomas Miller of the American Enterprise Institute argued that while there is some merit to the proposal, it would be greatly improved if we shifted to fixed-percentage tax credits for itemized deductions. So while the value of itemized deductions for households in the 28, 33, 35, and 39.6 percent tax brackets would be limited to 28 (or X) percent, the value of itemized deductions for households in the 10, 15, and 25 percent tax brackets would be increased to 28 (or X) percent, with X being some revenue-neutral number. Miller acknowledges that while a fixed-percentage tax credit isn’t an ideal vision for tax reform, it would “signal some sensitivity to fairness concerns.”

Republicans who are reluctant to back a substantial revenue increase yet who believe that easing the tax burden on middle-income households is good politics and good policy would be well-advised to embrace Miller’s fixed-percentage tax credit concept.

Under the American Taxpayer Relief Act (ATRA), Congress restored the Pease provision of the tax code, which had been in place from 1991 to 2009 and had been briefly suspended from 2010 to 2012. Though Pease is often described as a limit on itemized deductions for high-earners, Alan Viard writes that it is better understood as a stealth tax rate increase:

Here’s how the provision — which tax geeks call the Pease provision after its author, the late Congressman Donald Pease (D-Ohio) — normally works. Taxpayers with adjusted gross incomes above a threshold are taxed on an extra amount equal to 3 percent of the excess income over the threshold. Last week’s law sets the 2013 threshold at $300,000 for married couples. So, if a couple has $800,000 of adjusted gross income, Pease adds in an extra taxable amount of $15,000 (3 percent of the $500,000 excess income), on which the couple pays $5,940 of extra tax if they’re in the 39.6 percent bracket.

What does this have to do with itemized deductions? Nothing, except for how it’s labeled. The way the $15,000 gets added to taxable income is by subtracting $15,000 from the itemized deductions that the couple would otherwise claim. If the couple has $100,000 of charitable contributions, mortgage interest, state and local taxes, and other itemized deductions, Pease reduces the allowable deduction to $85,000. Deducting $85,000 rather than $100,000 makes taxable income $15,000 higher. But, calling the $15,000 a reduction in itemized deductions, rather than some other kind of increase in taxable income, makes no economic difference. No matter how it’s labeled, the extra taxable amount doesn’t change the couple’s incentive, on the margin, to give to charity or increase other itemized deductions.

Viard concludes by observing that Pease does not reduce the incentive for charitable giving, a claim that had been made by many critics in the wake of ATRA’s passage. Indeed, the increase in the top marginal tax rate from 35 to 39.6 percent makes charitable giving more attractive to the highest earners, though it has other consequences as well.

Patrick Brennan explains why closing loopholes that exclusively benefit high-earners won’t be enough to allow Senate Democrats to achieve their ambitious targets for increased revenue.

Shikha Dalmia argues that the notion that less-skilled immigrants rely heavily on the social-welfare system is more myth than reality. She does not, in my view, make a convincing case.

1. She claims that the reason very few visa applications are rejected on the grounds that the applicant might become a public charge is that existing visa rules largely screen out individuals who are likely to rely heavily on the social-welfare system. As Byron York discussed in a recent column, however, consular officials are not allowed to consider whether an applicant is likely to be eligible for SNAP, Medicaid, and a wide range of other means-tested benefits. 

Consider the following from a 2011 report by Curtis Skinner of the National Center for Children in Poverty:

In 2009, some 24 percent of children in immigrant families lived below the official poverty line and 51 percent below double the poverty line; the respective figures for children in native families were 18 and 38 percent. Although labor force participation and employment rates are very high among immigrant fathers, many work in low-wage jobs. Among immigrants, about 29 percent of children lived in a low-income working family in 2009 compared to 17 percent of native-family children. Research shows that the immigrant-family child poverty rate is negatively associated with parental education, English proficiency, length of U.S. residence, and citizenship status. In 2009, almost one-quarter of all children in immigrant families lived in “linguistically isolated” families in which no household member over age 14 speaks the English language very well. Moreover, 53 percent of immigrant-family children lived with at least one parent who had not graduated from high school, compared to 44 percent of native-family children. [Emphasis added]

As Skinner goes on to observe, it is true that immigrant families tend to access means-tested benefits at lower levels than their citizen counterparts. But he observes that this reflects a number of factors, including linguistic isolation and the fact that members of mixed-status families are reluctant to interact with the authorities. Efforts to regularize the status of unauthorized immigrants will likely change this landscape, increasing the number of eligible individuals who access benefits. 

It is possible that having large numbers of poor immigrants in the U.S. who do not access means-tested benefits is not something we ought to fret over, as the immigrants in question are better off than they were in their native country. This is a perfectly reasonable, but it is important to be explicit about it. 

The Kaiser Family Foundation described the health coverage landscape for non-citizens in a recent report:

Similar to native citizens, the majority of naturalized citizens have employer or other private coverage. However, non-citizens are nearly three times as likely to be uninsured relative to U.S.-born citizens, reflecting more limited access to both private and public coverage (Figure 1). Although non-citizens are as likely as citizens to work, they are often in jobs and industries that do not offer coverage. Further, non-citizens are subject to immigrant-specific eligibility restrictions in Medicaid and CHIP. Since 1996, lawfully residing non-citizen immigrants have been barred from enrolling in Medicaid and CHIP during their first five years in the United States. States were recently provided the option to eliminate this “five-year bar” for pregnant women and children, but do not have the option to waive the waiting period for other adults. Undocumented immigrants are prohibited from enrolling in Medicaid and CHIP. [Emphasis added]

Had KFF separated less-skilled immigrants from skilled immigrants, one assumes that the picture would change in important ways. KFF notes that a key barrier to expanded Medicaid coverage is lack of transportation and language barriers. That is, one reason why the number of non-citizens accessing Medicaid is not higher is that a large share of the non-citizen population in the U.S. does not have even limited English language proficiency or the means to travel. And so the fact that these individuals are not public charges flows from the fact that their resources and skills are so limited that they can’t navigate a complex bureaucracy. It should go without saying that this is unfortunate, yet as these individuals gains resources and skills, more are likely to become eligible for public assistance. 

2. Dalmia observes that Latinos are settling in states that tend to be less generous in terms of social service provision:

The dearth of proof for the view that people flock to the U.S. for welfare is long-standing. In fact, according to the Agriculture Department, which administers food stamps, Latinos in recent years have increasingly flocked to states such as Tennessee, Arkansas, Alabama, Texas and the Carolinas, which have stingy benefits and plentiful jobs, instead of to traditional gateways, such as New York and California, which have relatively generous programs.

The 10 states that experienced the largest percentage increase in their foreign-born population from 2000 to 2009 spent far less on public assistance per capita compared with the 10 states with the slowest-growing foreign-born populations.

One needn’t maintain that immigrants are flocking to the U.S. for welfare to believe that poor immigrants with limited skills and limited English language proficiency are likely to eventually become eligible for means-tested benefits, and the fact that profound poverty and linguistic isolation are barriers to accessing means-tested benefits does not mean that there is no reason for concern. Moreover, high-poverty states receive more generous federal transfers, e.g., more generous Medicaid match rates, etc. 

3. Dalmia makes the valid point that we need to consider educational and labor market outcomes for the children of immigrants:

Of course, even if immigrants don’t come to the U.S. to live off the welfare state doesn’t mean they don’t end up doing so. The best evidence for this claim came in the 2007 Heritage Foundation study, which found that even though immigrants have been barred since 1996 from receiving federal means-tested benefits, their households still obtain about $20,000 more in benefits and services (such as schools and emergency medical care) than they pay in taxes. The study estimated that these costs imposed in 2004 a net burden of about $90 billion annually and a whopping $1 trillion over a decade.

This would be cause for concern — if those numbers were the whole story. The study was criticized for counting government spending on the (American-born) children of immigrants but then ignoring the taxes these offspring paid when they grew up. By that standard, most middle-income families in the U.S. with three or more children in public schools would be a net burden. [Emphasis added]

First, immigrants have not been barred from receiving all means-tested benefits since 1996, as the National Immigration Law Center explains. Exceptions were carved out of the 1996 law and eligibility has been restored in the years since for a number of other programs. States can allow “qualified” lawful permanent residents to access TANF, Medicaid, CHIP, school breakfast and lunch programs, WIC, a variety of in-kind services, and SNAP. 

Moreover, note that Sessions et al. are making a narrow point about less-skilled immigrants who are likely to become eligible for means-tested benefits, not all immigrants. As George Borjas and Lawrence Katz observe in their paper on “The Evolution of the Mexican-Born Workforce in the United States,” the lagging performance of less-skilled immigrants relative to other immigrants and the native-born population is transmitted to future generations. So when Dalmia compares the native-born children of all immigrants to the children of middle-income native-born families, she’s not making a comparison that is relevant to the concerns raised by conservatives critical of permitting less-skilled immigration. Rather, the relevant comparison is between the children of skilled immigrants as opposed to the children of less-skilled immigrants. 

4. Dalmia notes that even if there is a net fiscal cost associated with immigration, it is outweighed by the larger social benefits.

State-level studies that have taken both into account consistently find that the economic contributions of these immigrants dwarf their fiscal costs. A 2006 analysis by the Texas comptroller estimated that low-skilled unauthorized workers cost the state treasury $504 million more than they paid in taxes in 2005. Without them, however, the state’s economy would have shrunk by 2.1 percent, or $17.7 billion, as the competitive edge of Texas businesses diminished. Likewise, a 2006 study by the Kenan Institute at the University of North Carolina found that although Hispanic immigrants imposed a net $61 million cost on the state budget, they contributed $9 billion to the gross state product.

Once again, we’re using a broad, diffuse category of Hispanic immigrants rather than less-skilled immigrants, regardless of ethnicity. The pressing policy question is whether it would be wise for U.S. policymakers to reduce the influx of less-skilled immigrants while commensurately increasing the influx of skilled immigrants who are deemed unlikely to become eligible for means-tested benefits. There is good reason to believe that such a substitution would yield a larger contribution to gross state product. 

5. Dalmia goes on to make a very similar point:

The Heritage Foundation study also implied that a homegrown working class would be cheaper for the country because households headed by low-skilled immigrants consumed $10,000 more in government services than those headed by Americans.

The trouble is that the study compared the welfare use of low-skilled immigrant households with average American households, rather than with low-skilled American households.

In comparing welfare use by immigrants with that of Americans in the same socioeconomic stratum, a different picture emerges, as a study by Leighton Ku and Brian Bruen of George Washington University for the Cato Institute found recently. Low-skilled foreigners, including adults and their U.S.- born children, were generally less likely than Americans to receive public benefits, such as from Medicaid, the Supplemental Nutrition Assistance Program and Supplemental Security Income. This is partly because many adults are in the U.S. illegally or on temporary visas or haven’t held a green card long enough to qualify for most means-tested benefits besides emergency health care. But the value of benefits they receive is usually lower, too.

“The combination of lower average utilization and smaller average benefits indicates that the overall cost of public benefits is substantially less for low-income non-citizen immigrants than for comparable native-born adults and children,” the Cato study concluded. [Emphasis added]

To reiterate, lower average utilization reflects the severity of linguistic isolation, among other factors. As this condition is alleviated, some immigrants will earn incomes high enough to become ineligible for means-tested benefits while others will become eligible for means-tested benefits. The crucial question is whether we ought to shift our immigration policy to reduce less-skilled immigration while encouraging more skilled immigration. 

I’ll make a few very simple claims, several of which are normative claims that not everyone will embrace:

(a) in the U.S., less-skilled individuals with limited English proficiency are likely to have lower lifetime incomes than skilled individuals who speak English fluently;

(b) individuals with low lifetime incomes are more likely to be eligible for and to rely on means-tested public benefits, particularly as they acculturate and learn to navigate U.S. institutions;

(c) the children of less-skilled individuals are likely to have somewhat lower skill levels and lifetime incomes than the children of skilled individuals;

(d) it is not incoherent to suggest that U.S. policymakers have more of an obligation to address the needs of less-skilled individuals, whether native-born or foreign-born, currently residing in the U.S. as opposed to those of less-skilled individuals residing elsewhere and who would like to access the U.S. labor market;

(e) and so an immigration policy that expands the population of less-skilled individuals is not the ideal course of action, particularly if we can instead craft an immigration policy that substitues an increase in the number of skilled immigrants for less-skilled immigrants. The Sessions effort to limit the influx of immigrants likely to become eligible for means-tested benefits is a reasonable start.

The labor market position of less-skilled individuals in the U.S. has been deteriorating for at least 30 years. If this development is somehow reversed in the coming years, I would be very amenable to embracing a different approach. 

Robert Bryce, author of Power Hungry and a senior fellow at the Manhattan Institute, has a new report on innovation in oil and gas production. The release of the report coincides with the publication of The Power Surge, a new book by Michael Levi of the Council on Foreign Relations. Both Bryce and Levi document the technological advances that have greatly increased the supply of recoverable hydrocarbons in the United States, a development they celebrate. But while Bryce is somewhat skeptical about clean energy technologies (with the exception of nuclear power, which he sees as promising, despite its high capital costs), particularly when contrasted against the “miraculous substance” that is oil.

Levi’s book, meanwhile, stakes out the middle ground, arguing that supporting the growth of hydrocarbon as well as renewable energy sources can be an entirely coherent and attractive strategy. Provided government takes demand-side measures to deter dangerous activities, like excessive carbon emissions, a less restrictive approach to permitting and access to land can constructively co-exist with efforts to foster zero-carbon technology development. The goal, according to Levi, is to build a more resilient energy portfolio.

Though Levi’s “most-of-the-above” strategy is appealing in many respects, my sense is that he is too sanguine about government intervention to support downstream consumer technologies, like new low-emission automobiles. (Investing in infrastructure designed to facilitate the adoption of autonomous vehicles, in contrast, is an option worth pursuing, but that’s a separate matter.) While the case for supporting upstream research and development efforts centered on carbon capture and solar radiation management, etc., is rock-solid, the case for supporting downstream innovation is much less so. Moreover, Levi is careful to call for “careful carbon pricing.” As Oren Cass argued last month in National Review, however, carefulness is in a sense the heart of the problem: to mitigate the regressive impact of carbon pricing and its tendency to encourage the offshoring of carbon-intensive activities, carbon pricing in practice “would quickly become a big-government labyrinth of new agencies, rules, and handouts.” This isn’t to suggest that a well-designed oil tax, a policy Levi has advocated with co-author Daniel Ahn, couldn’t do some good. And Levi has many other constructive suggestions as well, e.g., calling on state and local governments to embrace “smart zoning,” which I take to mean denser development. Recommendations aside, Levi also offers an illuminating account of the recent history of U.S. energy development, which establishes, among other things, that the private and the public sectors had much to do with recent breakthroughs in accessing tight oil and gas. 

The enthusiasm of both Bryce and Levi for shale gas development brought to mind the disruptive or empowering potential of distributed energy resources, as one avenue through which natural gas might impact energy use is through the adoption of home fuel cells. I wouldn’t bet that home fuel cells will spread like wildfire, as they remain fairly expensive and electric utilities are already taking advantage of low natural gas prices. But it’s not impossible to imagine some wedge opening up between grid electricity and a more do-it-yourself approach, particularly for energy-intensive manufacturers that might also take advantage of waste heat, etc. 

Earlier this year, Peter Kind of Energy Infrastructure Associates prepared a report for the Edison Electric Institute (EEI), the trade association for shareholder-owned electric utilities, warning that the proliferation of distributed energy resources (DER) threatens to devastate the U.S. electric utility industry and its centralized utility service model. If solar photovoltaics and battery storage become more cost-effective over time, as seems likely, EEI projects a scenario in which a growing number of firms and households will deploy DER technologies, thus reducing demand for the grid power provided by traditional electric utilities. This is turn will force utilities to increase electricity bills for their remaining customers, which will in turn spur further adoption of DER technologies. The following is one of the more entertaining passages from the report:

While the immediate threat from solar PV is location dependent, if the cost curve of PV continues to bend and electricity rates continue to increase, it will open up the opportunity for PV to viably expand into more regions of the country. According to ThinkEquity, a boutique investment bank, as the installed cost of PV declines from $5/watt to $3.5/watt (a 30-percent decline), the targeted addressable market increases by 500 percent, including 18 states and 20 million homes, and customer demand for PV increases by 14 times. If PV system costs decline even further, the market opportunity grows exponentially. In addition, other DER technologies being developed may also pose additional viable alternatives to the centralized utility model. [Emphasis added]

David Roberts of Grist has more analysis of the report. It is easy to see why EEI and its members dread the prospect of a DER revolution that would cripple incumbent utilities. And the transition from a centralized utility service model to reliance on DER will be a difficult one, as the vast majority of customers will continue to rely on grid electricity while some small but growing number of early adopters in sunny climates defect, thus generating strong political pressure on lawmakers to force electric utilities to hold down tariffs or increase subsidies as lucrative customers head for the exits.

But to those of us excited about the prospect of new empowering innovations — innovations that, according to Clay Christensen, “transform costly and complicated products into simpler, cheaper products available to the many,” and that create jobs “because they require more and more people who can build, distribute, sell and service these products” — the rise of DER technologies is excellent news. 

Josh Barro rejects the notion that the central problem with K-12 education in the U.S. is underspending, noting that the U.S. is among the highest-spending affluent market democracies.

The U.S. experienced an explosion in K-12 costs over the same period that we suffered from higher health inflation, but while the health cost explosion was exacerbated by our aging demographics, the education cost explosion was hidden by them: K-12 enrollments fell through the 1970s and 80s as the baby-boom generation aged, but the reduction in enrollments was largely offset by fast growth in per-pupil spending. But the broad story is the same as in the health-care sector: fast growth in unit costs without corresponding improvement in quality.

When the subject is health care, liberals have drawn the right lessons from the last 40 years of cost growth, understanding that more money doesn’t necessarily mean better outcomes. They should apply that same lesson to education: In a cost-bloated sector with poor quality improvement, we should be figuring out how to spend money better, instead of spending more of it.

So why are liberals are more inclined to embrace the notion that more money doesn’t mean better outcomes in medical care but not education? One explanation could be that liberals are actually wrong about medical care and right about education. Joseph Doyle, a health economist at MIT, has found that higher-cost hospitals appear to deliver better medical outcomes for emergency care patients. Though this is hardly conclusive evidence that higher spending levels yield better outcomes across the board, it does, as Arpit Gupta has suggested, challenge common assumptions about the amount of waste in U.S. medical expenditures.

In a similar vein, it could be that while public schools in Newark spend twice as much as the national average while yielding poor results, as Josh notes, this could reflect the fact that public school students in Newark are more than twice as hard to educate as the average U.S. student. This is the kind of explanation that advocates of increased spending are likely to embrace. But I don’t think this is the right way to think about the problem. In Milwaukee, for example, educational outcomes for students attending voucher-financed choice schools were essentially identical to those for comparable students attending local public schools, yet the per-pupil funding level for the Milwaukee voucher program was 50 percent that of the Milwaukee public-school system. Even if we assume voucher-financed choice schools rely on some amount of external funding to close the gap in quality, there appears to be a non-trivial gap in the effectiveness of spending. The goal of choice-based school reform, as Rick Hess has argued, should be to facilitate the emergence of high-quality or cost-effective suppliers, with the latter goal being as important as the former. 

Another reason why liberals might think differently about medical care vs. education is that while they consider publicly-employed teachers and administrators to be a sympathetic and appealing constituency, private insurers and medical providers, particularly those who are privately-employed, are somewhat less sympathetic and appealing. Conservatives, in contrast, are somewhat more inclined to identify with physicians in private practice, as they often have the mentality of small-scale entrepreneurs. The best version of conservative health reform, however, is motivated by the same goal as choice-based school reform, i.e., to facilitate the emergence of high-quality or cost-effective suppliers, a process that might run counter to the interests of physicians as insurers and integrated medical providers gain leverage over them. 

Rohin Dhar of Priceonomics argues that the artificial scarcity of taxis created by tight constraints on the supply of taxi medallions has been doomed by the rise of ride-sharing services. Yet he also argues that professional drivers, who have the knowledge and intuition to be in the right place at the right time and to read customers, will flourish in this emerging post-medallion system, earning substantially more than amateur drivers who choose to pick up a few shifts to supplement their income. Dhar ends his post by arguing that rather than entrenching the medallion system, local governments should work to protect the interests of drivers by preventing ride-sharing apps from requiring platform lock-in, i.e.:

Right now drivers can only work for one ride-sharing app. The company you drive for is responsible for 100% of your earnings – a level of control that could be abused. If regulators want to help consumers and drivers, they should mandate that a driver cannot be locked into one ride-sharing platform. A driver should be able to freely get a pickup call from Sidecar, Lyft or whomever. More competition between the ridesharing apps is good for drivers and good for consumers.

Dhar acknowledges that local governments might go in a very different direction and ban ride-sharing apps. It will be interesting to see which cities go in which direction, and how variation in medallion systems will correspond to variation in quality of life, cost of living, and accessibility.

Sen. Max Baucus (D-MT) and Rep. Dave Camp (R-MI) have stated that they are shooting for base-broadening, rate-lowering reform. And per their recent Wall Street Journal op-ed, they have established that the want to maintain the progressivity of the current tax code while also ensuring that low-income and middle-income Americans are shielded from a tax increase. One model for tax reform that meets these objectives is the “Modified Zero Plan,” devised by Paul Weinstein Jr. and Marc Goldwein for the center-left Progressive Policy Institute. Drawing on the illustrative “Zero Plan” tax reform proposal included in the Bowles-Simpson fiscal commission’s chairmen’s mark, the Modified Zero Plan replacing the six-bracket individual tax rate schedule with a three-bracket tax rate schedule (12, 22, and 28 percent), it eliminates all tax expenditures but the earned income tax credit (EITC) and the child tax credit (CTC), and it treats capital gains and dividends as ordinary income. 

Among conservatives, this last aspect of the Modified Zero Plan is likely to prove particularly unattractive, as there is a broad consensus on the center-right that while the capital gains tax preference is not an ideal policy, it is useful in that it counteracts other provisions of the tax code that discourage savings and investment. There are, however, a few other issues that merit consideration. First, the political momentum is against a robust capital gains tax preference. Preferential rates for long-term capital gains and qualified dividends were worth $36 billion and $31 billion respectively in 2010. ATRA raised capital income taxes for high-earners by a substantial amount relative to Bush-era rates, though the increase was smaller than it would have been in ATRA’s absence. The Affordable Care Act also imposes a new 3.8 percent tax on investment income for households earning $250,000. Even after these increases, the capital gains tax preference a tempting target. That is why the Obama administration continues to promote the “Buffett Rule,” which would raise effective taxes on long-term capital gains and qualified dividends above 28 percent. The Buffett Rule is bad policy, particularly when contrasted against the Modified Zero Plan. 

It is also possible that champions of the capital gains tax preference are underestimating the harm that flows from high labor income taxes. As Chris Sanchirico of the Tax Policy Center recently observed, capital income taxes aren’t set in a vacuum. Lower capital income taxes will mean higher labor income taxes or higher borrowing levels or lower spending, though of course lower spending could also allow lower labor income taxes. Sanchirico suggests that we ought to be more concerned about the possibility that labor income taxes reduce savings as much as capital income taxes.

And then there is the question of human capital. The capital gains tax preference is designed, among other things, to shield investment income from double taxation. One conceptual challenge, as Steve Randy Waldman explains, is that returns to human capital are impossible to distinguish from wages. “If human capital accumulation is as or more important than other forms of capital accumulation, and if the quality of effort that people devote to building human capital is wage-sensitive,” Waldman writes, “then taxing wages in preference to financial capital may be quite perverse.” Waldman writes from an idiosyncratic left-of-center perspective. Yet his argument resonates in interesting ways with a right-of-center argument that Gary Becker and Kevin Murphy made in 2007 in The American. Becker and Murphy observe that the widening gap in incomes can be attributed at least in part to the rising payoff from investment in human capital. Moreover, they provocatively argue that calls for raising labor income taxes on high-income individuals and cutting them for low-income individuals can be understood as “a tax on going to college and a subsidy for dropping out of high school.” It’s a safe bet that Becker and Murphy believe that capital income taxes should be low, but they do end their article by identifying human capital as “the most productive and precious form of capital.” 

I don’t think taxing capital income more heavily to cut taxes on labor income is obviously the right thing to do. The case for progressive consumption taxation, as made by Alan Viard and Robert Carroll, is very attractive, and I have generally favored Graetz-like approaches that move us closer to consumption taxation. But the difficulty of distinguishing wage income from returns to human capital really does complicate matters.

Garett Jones has more on this subject.

Peter Skerry dismantles Immigration Wars, focusing on the incoherence of its call for a “market-driven system of immigration”:

[E]ven if we assume that allowing high-tech firms to hire as many skilled employees as they claim to need would help achieve the 4 percent annual growth in GDP that Bush and Bolick set as their goal, would affording similar latitude to landscapers, restaurants, and hotels to hire unskilled laborers result in commensurate growth? The answer depends, in part, on the fiscal demands such unskilled immigrants put on public services. Addressing this point, Bush and Bolick emphasize that America needs high levels of immigration precisely because “the diminishing ratio of workers and those whose social services depend on them is shrinking alarmingly.” To back this up, they cite an authoritative 1997 study by the National Research Council reporting that “immigrants on average pay $1,800 more in taxes than they consume in services.”

Unfortunately, Bush and Bolick misinterpret this finding. Piling error upon error, they cite a Brookings Institution study that, itself, misinterprets the 1997 research. The original study does conclude that the average immigrant pays more in taxes than he receives in government benefits. But it then clearly notes that “most people would find this figure misleading .  .  . because it does not include the fiscal impacts of the immigrants’ young children born in the United States.” When such impacts are factored in, the $1,800 fiscal surplus turns into a $370 fiscal deficit.

Skerry’s broader concern is that Bush and Bolick appear to be more concerned about the short-term interests of potential employers of immigrant labor, like American apple growers, than the long-term costs associated with a dramatic increase in less-skilled immigration. Having defended one core aspect of Immigration Wars, I found Skerry’s review illuminating.