The Line Item Veto and Public Sector Budgets: Evidence from the States

Recent proposals assume that endowing the U.S. President with a line item veto will reduce spending. Analysis of a rich set of state budget data indicates that long run budgets are not altered by an item veto. In the short run, the item veto's potency is contingent upon the political setting. Governors with political incentives to use an item veto alter spending and revenues in a statistically significant and quantitatively important fashion. These results suggest that adoption of the line item veto, in general, is unlikely to reduce the size of the federal government.

Public Policy and Entrepreneurship

The image of the American entrepreneur retains an enduring fascination in the minds of the public and policy makers alike. For example, testifying several years ago at a congressional hearing on "the entrepreneurial spirit in America," Wisconsin's Senator Robert Kasten said of entrepreneurs: "They create new jobs. They provide new competition to existing businesses. They help to improve product quality, help to reduce prices, add new goods and services never before thought of, advance new technologies, America's competitive stance." His statement captures the view that entrepreneurial enterprises are valuable sources of technological advance, jobs, and dynamism, a trait commonly attributed to small business as a whole. Our national affection toward entrepreneurs also manifests itself in attitudes towards small business. "Start-up," "family," and other small-scale businesses carry an important weight in discussions of national policy. This durable affection stems in part from the perception that small business is the vehicle by which entrepreneurs provide needed vigor to the economy. In the newly established democracies of Eastern Europe a widely discussed challenge is the need to regenerate a vital entrepreneurial sector. The centralized regime pushed the mass production paradigm to its limit, at times concentrating the entire production of a good in a single factory. The dismal record of poor quality products and stagnant economic growth highlights the need for the competition and vigor provided by start-up enterprises. The national focus on small business is not merely talk. Many government policies are directed toward aiding small businesses. For example, the Revenue Reconciliation Act of 1993 (RRA93) permits the exclusion of 50 percent of capital gains on qualifying investments in start-ups and small businesses held for five or more years. This brief surveys the various notions of "small business," presents criteria that should underlie policies toward business, and reviews the case for public policies to stimulate entrepreneurship and small business. It concludes that it is surprisingly difficult to construct a case in favor of systematically favoring small businesses. Indeed, it is probably not useful to think of creating a "small business climate" through policies like targeted tax breaks, wage subsidies, loan guarantees or outright grants. Instead, policies should be devoted to developing an ehnvironment favorable to innovation, employment, and growth in the economy as a whole.

"Is Health Insurance Crippling the Labor Market?"

While discussion about health care encompasses a wide array of issues-inadequate access, the growing share of national resources devoted to health care, the incidence of cost-shifting from the uninsured to the insured, and differences in premium costs between seemingly similar insured individuals-growing significance has been placed on how aspects of the current system may create distortions in the labor market. Some of these issues are addressed in this working paper, including the extent to which labor market mobility is hampered by the nonportability of employer-provided insurance.

"Job-Lock: An Impediment to Labor Mobility? Is Health Insurance Crippling the Labor Market?"

Recent survey results and anecdotal evidence appear to indicate that workers sometimes sacrifice job opportunities by remaining in their current position in order to retain health benefits. If "job-lock" is real, the nation pays an economic price in terms of a misallocation of workersamong productive opportunities, higher relocation and training costs for workers who have stayed too long in their jobs, and the loss of innovation, employment, and competition associated with start-up ventures. Holtz-Eakin suggests that the incidence of job-lock may be overstated. Therefore, reform programs proposing to dismantle the current system of employer-provided insurance in order to improve labor mobility are misguided. Rather, policy should aim to improve access to health care, improve the efficiency of insurance operations, and guarantee the portability of insurance coverage and premium expenses.

Complex anisotropy beneath the Peruvian flat slab from frequency-dependent, multiple-phase shear wave splitting analysis

Flat or shallow subduction is a relatively widespread global occurrence, but the dynamics remain poorly understood. In particular, the interaction between flat slabs and the surrounding mantle flow has yet to be studied in detail. Here we present measurements of seismic anisotropy to investigate mantle flow beneath the Peruvian flat-slab segment, the largest present-day region of flat subduction. We conduct a detailed shear wave splitting analysis at a long-running seismic station (NNA) located near Lima, Peru. We present measurements of apparent splitting parameters (fast direction ? and delay time ?t) for SKS, ScS, and local S phases from 80 events. We observe well-defined frequency dependence and backazimuthal variability, indicating the likely presence of complex anisotropy. Forward modeling the observations with two or three layers of anisotropy reveals a likely layer with a trench-normal fast direction underlying a layer with a more trench-oblique (to trench-subparallel) fast direction. In order to further constrain the anisotropic geometry, we analyzed the source-side splitting from events originating within the slab measured at distant stations. Beneath the flat-slab segment, we found trench-normal fast splitting directions in the subslab mantle, while within the dipping portion of the slab further to the east, likely trench-subparallel anisotropy within the slab itself. This subslab pattern contradicts observations from elsewhere in South America for “normal” (i.e., more steeply dipping) slab conditions. It is similar, however, to inferences from other shallowly dipping subduction zones around the world. While there is an apparent link between slab dip and the surrounding mantle flow, at least beneath Peru, the precise nature of the relationship remains to be clarified

A Cluster Randomised Trial Evaluation of the Media Initiative for Children: Respecting Difference Programme

Evaluates trial outcomes of a preschool program designed to raise awareness of diversity issues, increase empathy, and promote inclusive behaviors among children, early childhood practitioners, and parents. Considers implications for further development

A study of mitochondrial membranes in relation to elementary particles

Elementary particles that commonly have been seen by electron microscopy to be attached by stalks to mitochondrial cristae in negatively stained preparations, were not apparent in similarly stained mitochondria from exponentially growing wild-type Neurospora crassa when these were isolated in sucrose solution containing 1 x 10^-3 M EDTA. However, elementary particles were easily demonstrable in electron micrographs if the mitochondria were isolated without EDTA in the sucrose solution. A biochemical study indicated that both kinds of mitochondrial preparations, isolated in the presence or absence of EDTA, had about the same capacity for oxidative phosphorylation. Observations on rat-liver mitochondria also suggested that the stalked elementary particles were more easily demonstrated if the preparation was made in the absence of EDTA. It was difficult to demonstrate elementary particles in wild-type Neurospora mitochondria isolated with or without EDTA and subsequently prepared for electron microscopy by spreading on the surface of an aqueous solution of potassium phosphotungstate. Elementary particles could be demonstrated in poky Neurospora mitochondria isolated with EDTA if the mitochondria were spread on the surface of an aqueous solution of phosphotungstate. It was concluded that biochemical functions associated with elementary particles are independent of structural configuration as seen by electron microscopy

Distortion Costs of Taxing Wealth Accumulation: Income Versus Estate Taxes

Recently, attention has focused on the estate tax. To date, however, the debate over estate taxes has been nearly devoid of standard considerations of deadweight loss. We develop a framework for computing the deadweight loss of a revenue-neutral switch from an estate tax to a capital income tax, focusing on the potential lifetime behavioral responses in anticipation of paying the estate tax, while requiring relatively few parameters to estimate. We conclude that eliminating the estate tax and replacing the revenue with that from a capital income tax will likely enhance economic efficiency. Specifically, using our baseline parameter estimates we estimate that the mean decrease in deadweight loss is $0.018 per dollar of wealth. There is, however, considerable heterogeneity in the estimated impact. Importantly, our estimates are based on data that do not contain the 'super-rich' who are most highly affected by the estate tax.

"Public Infrastructure Investment: A Bridge to Productivity Growth? Public Capital and Economic Growth, ; New Federal Spending for Infrastructure: Should We Let This Genie Out of the Bottle?

This brief presents contrasting views on the effects of public infrastructure investment on private sector productivity. Aschauer states that the slower rate of productivity growth since the early 1970s--coupled with an aging population, the declining proportion of workers to the total population, and other demographic factors--poses a dilemma for policymakers interested in strengthening the long-term relative position of the United States in an increasingly competitive global economic environment. He considers public infrastructure to be a factor in production and the decline in public capital to be responsible for part of the productivity slowdown. In contrast, Holtz-Eakin dismisses the conventional arguments for a federal infrastructure program by asserting that a large-scale public infrastructure program has no appreciable effect on productivity growth; in the current fiscal climate of scarce federal resources, a federal infrastructure program is not consistent with the goal of deficit reduction; there are better infrastructure strategies than new spending and massive construction programs; and policies aimed at increasing private rather than public investment will have a more positive impact on U.S. competitiveness.