-Caveat Lector- ------- Forwarded Message Follows ------- National Center For Policy Analysis POLICY DIGEST Tuesday, September 28, 1999 PointCast can automatically load NCPA's Policy Digest summaries on your desktop for easy reading. For information go to http://www.ncpa.org/pointcast.html * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * WE’VE GOT THE BODY BUT WE NEED YOUR BRAINS! * * * * If you have online marketing management and technical skills, * * we have the place you can use them!!! The NCPA is looking for * * an Online Marketing Manager at the Dallas office. Check out * * the requirements at http://www.ncpa.org/about/onlinemgr2.html * * and if you are interested please email your resume to Drew * * Anderson at [EMAIL PROTECTED] * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * IN TODAY'S DIGEST o SOCIAL SECURITY REFORM WITHOUT TAX INCREASES or benefit cuts is possible with personal retirement accounts, concludes a new study....NCPA o THE STOCK MARKET FELL DUE TO THE TAX-CUT VETO, says Lawrence Kudlow, because long-term growth will be lower....WASHINGTON TIMES o A PANEL OF SCIENTISTS FOUND PLASTIC SOFTENERS ARE SAFE, but a number of countries have banned such products...NEW YORK TIMES o TEMPORARY IMMIGRANT VISAS LEAD TO ABUSE & FRAUD, say observers, while permanent status for skilled workers would benefit the economy....INVESTOR'S BUSINESS DAILY o A EUROPEAN COURT SAYS BRITISH MILITARY MUST ACCEPT HOMOSEXUALS, overturning a 30-year-old policy....NEW YORK TIMES o CANADIANS WAIT FOUR MONTHS OR MORE FOR HEALTH CARE from specialists -- 43 percent longer than in 1993....FRASER INSTITUTE o EXPERTS QUESTION THE RELIABILITY OF EYEWITNESSES and several convictions have been overturned....AMERICAN BAR ASSOCIATION JOURNAL o PREFUNDING MEDICARE, OR GIVING SENIORS VOUCHERS to pay for a health plan, should encourage efficiency, say economists....AMERICAN ECONOMIC REVIEW IN TODAY'S NEWS COMPARING PROPOSALS FOR SOCIAL SECURITY REFORM The projected federal budget surplus offers an opportunity to reform Social Security and eliminate its current multi-trillion dollar unfunded liability, says a new study by the National Center for Policy Analysis (NCPA). In the first comprehensive comparative analysis of major reform proposals before Congress, the NCPA study found that Social Security's future funding crisis can be averted by allowing workers to put some of their Social Security payroll tax dollars into personal retirement accounts invested in the private capital market. The NCPA study analyzed reform plans proposed by Sens. Phil Gramm and Pete Domenici; Reps. Bill Archer and Clay Shaw; and a bipartisan proposal by Sens. John Breaux, Judd Gregg and Bob Kerrey in the Senate and Reps. Jim Kolbe and Charlie Stenholm in the House. In addition, the study analyzed a proposal offered by the NCPA in conjunction with the Private Enterprise Research Center (PERC) at Texas A&M University. The plans analyzed differ in the extent to which personal retirement accounts replace Social Security benefits. o Under the Archer-Shaw plan, young people entering the workforce today would rely on their personal retirement accounts for about half of their Social Security benefits (see Figure XII http://www.ncpa.org/studies/s227/s227f11.gif ). o Under the Gramm-Domenici plan, today's young workers would rely on their personal retirement accounts for two-thirds of their Social Security benefits. o By mid-century under the bipartisan plan, retirees would rely on their accounts for about 70 percent of their benefits; however, those benefits would be significantly smaller because of increases in the retirement age and adjustments in the benefit formulas. Although the short-term cost of funding the transition to personal retirement accounts is high -- requiring almost all of the budget surplus -- changing the system now will more than pay for itself and require much lower tax rates than are projected under the current system (see Figure XIII http://www.ncpa.org/studies/s227/s227f13.gif ). Source: Liqun Liu and Andrew J. Rettenmaier, "Comparing Proposals for Social Security Reform," NCPA Policy Report No. 227, September 1999, National Center for Policy Analysis, 12655 N. Central Expy., Suite 720, Dallas, Texas 75243, (972) 396-6272. For text http://www.ncpa.org/studies/s227/s227.html For more on Plans for Partial Privatization http://www.ncpa.org/pi/congress/cong5d.html STOCK MARKET RESPONDS TO TAX-CUT VETO Most economic commentators are attributing the recent downturn in stock prices -- also known as a market correction -- to the Federal Reserve's threatened interest rate hike and the sudden rise of the Japanese yen. But one thing nobody is talking about is the negative stock market impact of President Clinton's tax- cut veto, notes economist Lawrence Kudlow. o Yet the market responded positively when Congress passed a broad-based pro-investor tax cut bill in late July and early August, with the Dow moving from 10,600 to nearly 11,400. o The stock market looked beyond the Fed's light tapping on the monetary brake and saw stronger future economic growth and profitability from inflation-indexed capital gains, estate tax elimination, expanded IRAs, an end to the alternative minimum tax, health insurance deductions and income tax-rate relief in the tax cut bill. o Supply-siders such as Gary and Aldona Robbins estimate that the Republican tax-cut package would add as much as one-half of 1 percentage point to the long-term economic growth rate, with derivative benefits for risk-taking, capital formation, productivity and profits. o That long-term wealth creation would be capitalized into higher share prices. But last week, when the president vetoed the bill, the market promptly fell more than 500 points. Source: Lawrence Kudlow (chief economist, CNBC.com and Schroder & Co. Inc.), "Fiscal Follies Spooking Markets," Washington Times, September 28, 1999. For text http://www.washingtontimes.com/opinion/ed3.html For more on Current Tax Legislation http://www.ncpa.org/pi/congress/cong2.html DEBATE OVER PLASTIC SOFTENERS Phthalates are chemicals that make plastic flexible so it can be used in tubes for blood transfusions, intravenous feeding and other life-support systems at hospitals and clinics around the world -- and in some children's toys. Some scientists and consumer advocates say they may be dangerous because small amounts can leach into the bloodstream and, they say, animal studies have shown them to cause cancer and other serious ailments. But a panel of scientists led by former Surgeon General C. Everett Koop announced in June that phthalates (pronounced THAL- ates) are perfectly safe. Here are some of the events leading up to the organization of the panel by the American Council on Science and Health. o In October 1998, the U.S. Consumer Product Safety Commission (CPSC) asked manufacturers to stop using DINP phthalates to make plastic teethers, rattles and nipples because of safety concerns. o The next month, the National Environmental Trust and 11 other consumer groups sought a ban of phthalates from toys for children under age 5. o Previously, eight European countries had banned or regulated the substance in toys. o In December, the CPSC urged parents to throw away nipples and pacifiers containing DINP, but said it did not have enough evidence to issue a ban. Scientists on the panel say the few studies that do show potential harm from phthalates are based on such small numbers of human cases as to be inconclusive, or are based on animal studies not applicable to humans. On the other hand, a review of the animal and human toxicology literature, published in 1990, concluded that there was no evidence to support the hypothesis that phthalates caused kidney cancer in humans. Source: Holcomb B. Noble, "A Debate Over Safety of Softeners for Plastic," New York Times, September 28, 1999. For text (requires free registration) http://www.nytimes.com/library/national/science/health/092899hth-children- pl astic.html For more on the Environment go to http://www.ncpa.org/pi/enviro/envdex1.html THE BEST WAY TO GET SKILLED IMMIGRANTS Temporary foreign workers with skills and education may only come to the U.S. on limited visas (H1-B visas). They go primarily to the growing high-tech sector, where they are in such demand that the limit of 115,000 H1-B visas was reached by June. Critics believe ending the policy of temporary visas will correct a number of problems. Among them: o Sham companies petition for temporary workers, visa applicants falsify applications, and the potential for planting spies in sensitive industries is great. o Claiming a shortage of available high-tech workers, U.S. firms nevertheless laid off 140,000 workers last year -- then lobbied Congress to raise the H1-B quota, raising questions of age discrimination. o Compelling evidence exists that high-tech companies fail to hire recent computer science grads while, to suppress wages, contract H1-B workers through placement firms that deal only with foreigners. Meanwhile, current immigration policy doesn't meet the country's needs. While the demand for low-skilled workers remains low, the high-tech industry will need 1.3 million new workers between 1996 and 2006. Yet two-thirds of legal immigrants admitted every year come in on family ties without consideration of skills or education, and many become an economic drain on the country. Critics suggest a change in immigration policy: end temporary visas, and judge candidates for immigration on a point system. o A high school diploma would be a requirement, while a B.A. would earn more points, and an advanced degree even more. o Another criterion would be verifiable occupational skills in a growing industry for which there are not enough native workers. o Literacy and English proficiency would count. o If someone has a nuclear family member (spouse or minor children), it would be worth many points, but grown children, parents or distant relatives would be worth far fewer -- and having illegal immigrant relatives here would disqualify one from entering the country. Source: James R. Edwards, Jr., "The Right Way To Get Skilled Foreign Workers," Investor's Business Daily, September 28, 1999. For more on Immigration Policies http://www.ncpa.org/pd/immigrat/policies.html COURT OVERTURNS BRITISH MILITARY'S HOMOSEXUAL POLICY The European Court of Human Rights has ruled that Britain's ban on homosexuals in the military violates the right to privacy, making it a near certainty that the British armed forces will be forced to accept homosexuals, something they have resisted in the past. o Over the past 30 years, somewhere between 600 and several thousand homosexuals have been discharged from the British armed forces. o Defending its policy, the British government argued that the presence of homosexuals depressed morale, incited prejudice, and disrupted people's ability to do their jobs. o It cited a 1996 survey that reported a preponderance of members of the military did not want to serve with homosexuals. o However, the court, made up of judges from Britain, France, Cyprus, Lithuania, Austria, Norway and Albania, ruled 7-0 against British policy. The court said Britain had violated Article 8 of the European Convention on Human Rights, which says that "everyone has the right to respect for his private and family life, his home and his correspondence." Source: Sarah Lyall, "European Court Tells British To Let Gay Soldiers Serve," New York Times, September 28, 1999. For text (requires registration) http://www.nytimes.com/library/world/europe/092899britain-gay-military.htm l For more on Social Policy http://www.ncpa.org/pd/social/social.html IN OTHER NEWS MORE CANADIANS ON HOSPITAL WAITING LISTS IN 1998 The Fraser Institute's annual survey, "Waiting Your Turn: Hospital Waiting Lists in Canada," has found that more Canadians were waiting to receive medical treatment in 1998 than in 1997. Queues for visits to specialists and for diagnostic and surgical procedures reflect health care rationing under Canada's national health system. According to the study, 212,990 Canadians were on hospital waiting lists for surgical procedures, a 13 percent increase from the 1997 estimate of 187,799. Patients were also waiting longer to receive treatment: o Patients waited an average (median) of 6.0 weeks after referral by a General Practitioner for a consultation with a specialist (see figure http://www.fraserinstitute.ca/media/media_releases/1999/wyt/chart2.html ). o Then they waited another 7.3 weeks after the consultation to actually receive treatment (see figure http://www.fraserinstitute.ca/media/media_releases/1999/wyt/chart3.html ). o The total average waiting time in 1998 was 13.3 weeks -- up from 11.9 weeks in 1997, and up a dramatic 43 percent since 1993, when the total waiting time for Canadians to receive treatment was 9.3 weeks. The total wait in 1998 varied widely according to where Canadians live: from 11.9 weeks in the provinces of Ontario, Quebec and Nova Scotia, to 20.2 weeks in Saskatchewan. The survey also measured what specialists consider to be clinically reasonable lengths of time to wait for surgical procedures. For Canada as a whole, and across all specialties, actual waiting time exceeded what specialists consider to be reasonable for all specialties except medical oncology. Waiting times also increased for various diagnostic technologies such computerized tomography (CT) scans, magnetic resonance imaging (MRI) and ultrasound. Source: Michael Walker and Martin Zelder, "Waiting Your Turn: Hospital Waiting Lists in Canada (9th edition)," Critical Issues Bulletin, 1999, Fraser Institute, 4th Floor, 1770 Burrard Street, Vancouver, B.C. V6J 3G7, Canada, (604) 688-0221. Full text http://www.fraserinstitute.ca/publications/critical_issues/1999/waiting_yo ur _turn/ For more on Health issues http://www.ncpa.org/pi/health/hedex1.html EYEWITNESS RELIABILITY QUESTIONED The reliability of eyewitness testimony in criminal proceedings is being called into question in a number of jurisdictions across the United States, according to a story in the October issue of the ABA Journal, published by the American Bar Association. According to the Journal article, several convictions have been overturned or are being reviewed in light of testimony from experts on the questionable reliability of eyewitness identifications. Interest in revisiting eyewitness reliability can be attributed to the recent rash of exonerations based on DNA testing. Many of the convictions overturned in these cases were based on eyewitness identifications. o The Tennessee Supreme Court is expected to decide by early next year whether convicted robber Eddie L. Coley Jr., who is black and was convicted only on eyewitness identifications by two white clerks, should have been allowed to present expert testimony on the unreliability of eyewitness identifications when a victim of one race identifies a suspect of a different race. o In Georgia, the state Supreme Court is considering whether eyewitness expert testimony should be admitted in the robbery trial of Keith Johnson, whose accusers identified him from a photo lineup five months after the attack. o The New Jersey Supreme Court ruled in April that convicted rapist McKinley Cromedy was entitled to jury instruction on the dependability of cross-racial identification. o Similar rulings have been handed down this year in Utah and Massachusetts. The Journal reports that many experts say that eyewitness reliability can be affected by factors such as race, stress, lighting, focus on weapons or other features instead of faces, the length of time a witness sees a suspect, and the length of time between the crime and the identification. Source: News release, "ABA Journal: Eyewitness Reliability Called Into Question," American Bar Association, September 27, 1999. For ABA Journal http://www.abanet.org/journal/home.html For more on Courts http://www.ncpa.org/pi/crime/crime41.html#D MEDICARE: OBSTACLES AND OPTIONS FOR LONG-TERM REFORM For the past three decades, Medicare spending has grown substantially faster than the economy and faster than private health spending, say economists. Aging baby boomers will place unprecedented demands on the program as they reach age 65, beginning in 2011. o In 1999, the Medicare program will spend $230 billion, about 13 percent of the federal budget, on the behalf of some 39 million elderly and disabled individuals. o Medicare enrollment is projected to reach 47 million people by 2010, growing to about 75 million people in 2030. o Assuming no change in policy, Medicare spending will grow from 2.6 percent of Gross Domestic Product in 1995 to 6.3 percent of GDP in 2030. Recent policy debate has centered around two approaches to restructuring Medicare, both of which rely on making beneficiaries more aware of the cost of health care, ensure efficiency and maintain high standards of quality. o Proposals to prefund Medicare would require people to save during their working years to finance health insurance after they retire. o Unlike pay-as-you go financing, prefunding fully accounts for both the greater health needs of a larger number of beneficiaries and their greater ability to finance those needs over their lifetimes. o Under a defined-contribution or voucher plan, Medicare would make a fixed payment to beneficiaries who would choose from a range of health plans, paying extra if their chosen plan's premium exceeded Medicare's payment. In principle, by requiring beneficiaries to pay the marginal costs of higher-cost plans, health plans would have incentives to compete on the basis of price and become more efficient in lowering costs and reducing the future financial burden to workers. Source: Joseph R. Antos and Linda Bilheimer (Congressional Budget Office), "Medicare Reform: Obstacles and Options," American Economic Review: Papers and Proceedings, May 1999. For more on Medicare http://www.ncpa.org/pi/health/hedex7.html * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * NATIONAL CENTER FOR POLICY ANALYSIS DALLAS, TEXAS "Making Ideas Change the World" Internet Address: http://www.ncpa.org * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * A<>E<>R ~~~~~~~~~~~~~~~ The only real voyage of discovery consists not in seeking new landscapes but in having new eyes. -Marcel Proust + + + + + + + + + + + + + + + + + + + + + + + + + + + + "Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your common sense." --Buddha + + + + + + + + + + + + + + + + + + + + + + + + + + + + A merely fallen enemy may rise again, but the reconciled one is truly vanquished. -Johann Christoph Schiller, German Writer (1759-1805) + + + + + + + + + + + + + + + + + + + + + + + + + + + + It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly. -Bertrand Russell + + + + + + + + + + + + + + + + + + + + + + + + + + + + "Everyone has the right...to seek, receive and impart information and ideas through any media and regardless of frontiers." 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