Renewing America is launching a new feature today called the “Policy Initiative Spotlight.” We will identify and highlight important policy innovations, noteworthy experiments, or little-noticed success stories that could play a positive role in rebuilding U.S. economic strength. Many of these will be state or local efforts, though at times we will also write about international developments that have direct relevance for the United States. Read more »

With the end of the March deadline looming, Congress passed the ninth extension to the current highway funding bill (NYT). The bill extends construction funding and the federal gas tax until the end of June but does nothing to resolve the conflict between House and Senate versions of a new transportation infrastructure bill to replace one that expired in September of 2009. The Senate recently passed a two-year, $109 billion version, while the House has yet to vote on its five-year, $260 billion proposal. Debates rage on a host of issues such as overall costs, funding for public transit, and new oil drilling on public lands. Read more »

The Environmental Protection Agency (EPA) proposed limits for carbon dioxide emissions of new power plants (NYT). The rules will require future power plants to restrict emissions to less than 1,000 pounds of carbon dioxide per megawatt hour.  The proposal would effectively eliminate coal as a potential fuel for new power plants, as today no carbon capture and sequestration technology is currently available to economically fulfill the new EPA requirements. Coal currently supplies less than 40 percent of U.S. electricity but has been in steady decline; new natural gas power plant construction was spurred by improved combined-cycle combustion technology and natural gas prices falling to ten-year lows. Read more »

In an op-ed in Politico, Jeff Zients, acting director of the Office of Management and Budget, and John Engler, former republican governor of Michigan, argue for increasing presidential power to reorganize the federal government. Until the 1980s, presidents could submit reorganization plans to Congress for an up-or-down vote. Restoring this authority to presidents, they claim, would enable quick congressional approval to consolidate duplicative programs. Reducing overlap would shrink government costs and could accelerate economic growth by reducing the time and effort it takes for individuals and firms to comply with regulations. Read more »

A friend of mine, who has held senior positions in the Congress and the Commerce Department, used to warn against attributing any Machiavellian logic to U.S. government actions. Most decisions, he rightly points out, are the product of large bureaucracies that operate more or less on auto-pilot. Read more »

The Boston Consulting Group (BCG) released a report identifying seven industries poised to return manufacturing to the United States from China over the decade. Re-shoring will be driven by increased Chinese labor costs, the volatility of other Chinese costs (e.g., exchange rates, transportation), and an increasingly productive U.S. manufacturing sector. The report suggests 600,000 to 1 million new U.S. manufacturing jobs could be directly created, along with 1.8 to 2.8 million additional indirect jobs. Read more »

The nonpartisan Congressional Research Service (CRS) reported that income tax credits and deductions cost over $1 trillion annually in foregone revenue. Eliminating these special tax incentives could yield a simpler tax code with smaller rates. However, elimination would be unpopular as over 90 percent of the potential savings is concentrated into 20 programs that benefit millions, such as the mortgage-interest deduction, and the non-taxable status of employer provided health insurance. Both the Washington Post and Wall Street Journal analyzed the report. Read more »

I have been surprised by the recent coverage in the American press of gasoline prices and politics. Political pundits agree that presidential approval ratings are highly correlated with gas prices: when prices go up, a president’s poll ratings go down. But, in view of America’s long history of neglect of energy security and resilience, the notion that Barack Obama’s administration is responsible for rising gas prices makes little sense. Read more »

High oil prices, improved extraction technologies and declining demand have reduced U.S. dependence on foreign energy (NYT).  Demand decreased as the recession and higher gasoline prices led Americans to drive less and to buy more fuel efficient vehicles.  Oil is a globally traded commodity, so prices have remained high even as domestic oil production rose from almost 5 million barrels a day in 2008, to nearly 5.7 in 2011 and imports of all liquid fuels fell from 60 percent in 2005, to 45 percent in 2011.  Global trading of natural gas is limited; booming domestic production drove prices down 46 percent in 2011 and gas storage facilities are approaching capacity limits (WSJ). Read more »

The Hill reports that President Obama will issue an executive order requiring agencies to conduct faster reviews of infrastructure projects. The Obama administration will also issue another memo to specifically expedite permitting of the portion of the Keystone XL pipeline stretching from Oklahoma to refineries on the Texas Gulf Coast. This executive order may not have much effect on the project schedule; Bloomberg BusinessWeek reports that construction plans for the southern portion of the Keystone XL pipeline will not change from a scheduled June start. The announcement occurred during a four-state energy tour, during which President Obama vowed to continue making large investments in solar energy (TheHill). Read more »