Will Employee Health Coverage End Up Like Employee Retirement Income?

A long time ago, companies shifted their employee retirement programs from defined benefit plans to self-managed defined contribution plans.

Employees no longer are guaranteed a defined benefit, that is, a pension, but are provided with a defined contribution -- they put in their own money and the company contributes matching funds up to a certain percentage.

Companies no longer bear the burden of making sure their employees have income after retirement.  Employees must manage their retirement accounts themselves -- typically choosing from an array of investment alternatives offered by their employer.

If the employee contributes enough and chooses the investments wisely, he or she may have enough for a comfortable retirement.  If not, well . . . .

We are beginning to see a similar move with employee health care coverage.

Companies long have provided employees with medical coverage.

We now are seeing a shift away from what may be loosely referred to as a "defined benefit insurance plan" -- where the company provides the benefit of coverage and pays most of the cost for employees -- to a "defined contribution insurance plan", where the company contributes a sum of money and requires the employee to purchase a plan directly from an insurer.

On October 1, the Affordable Care Act will begin providing public "exchanges" where various plans may be purchased.  Insurance and consulting companies already are setting up private "exchanges" doing the same thing.

Large companies should like the idea, as most are self-insured.  Requiring employees to buy their own coverage shifts the risk away from the company to the insurer, thus making the company's employee health care costs more predictable.

Is this the future?

Employees have accepted the shift away from guaranteed pensions to self-managed 401(k) plans.  Are we seeing the beginning of self-managed insurance benefit plans?

Talking Points for Common Core State Standards

We have heard lots of talk about the Common Core State Standards.  And not all of the talk has been based on facts. 

The process for developing the new voluntary state standards was begun in 2009 by the National Governors' Association and the Council of Chief State School Officers.  Policymakers, parents and the business community supported the effort. 

But recently, as the Obama Administration has begun to promote the benefits of the state standards, some folks are expressing opposition.  Some even are saying the reading and math standards developed by the states somehow are a liberal plot to indoctrinate our youth!

Facts don't always matter to some people, but here are some talking points that may be useful.

• Math is math.  Simply put, math is no different in Boise than in Boston.
• Our American students will be competing for jobs with people from all over the world, and should have a solid understanding of math, as well as English Language Arts and other subjects.
• The Common Core State Standards were developed by the states, not by the federal government.  The National Governors' Association and the Council of Chief State School Officers organized and convened many meetings of state officials, who developed the standards.
• The U.S. Department of Education had no role in creating the state standards, but is encouraging states to adopt them -- as 45 states and the District of Columbia have done -- in order to help students succeed.
• The Common Core State Standards outline what to teach, not how to teach it.  States and local school districts develop their own curricula.
• The Common Core State Standards are robust and relevant to today's world. 
• Our students are our future.  The Common Core State Standards reflect what our students need to know in order to succeed in college and their careers.

I hope this helps.

Can Congress Pass Trade Promotion Authority?

This week, President Obama called on Congress to restore Trade Promotion Authority so America can negotiate the best trade deals.

Trade Promotion Authority is the process that provides for Congress to vote up-or-down on completed trade agreements without the opportunity for after-the-fact amendments in return for consultations with the Administration during the negotiations.

TPA was last renewed in 2002, and it expired in 2007.

Getting the best trade deals should be an easy bipartisan issue.  But the political parties tend to support TPA if someone from their party is President and oppose it if not.

Opponents will tell you that TPA isn't required for completing trade negotiations.  That's true, but it is required for making sure the U.S. gets the best deal.  Obviously, if our counter-parties know Congress can make further demands with amendments after the agreement is completed, they will hold something back and not give us the most favorable terms.

TPA will give U.S. negotiators a very useful tool for completing the Trans-Pacific Partnership and the new agreement with the European Union, both of which will provide significant benefits for U.S. workers, as the new agreements will open markets and enable us to sell more U.S. products and services overseas.

We already have seen partisan wrangling since the President asked for TPA.  We'll likely see lots of distractions and side issues with Congressional elections next year and the 2016 Presidential jockeying in full swing.

Bipartisanship is hard to find these days -- and poll after poll shows the people are tired of the bickering and sniping. 

Members of Congress can do themselves -- and American workers -- a great service by enacting Trade Promotion Authority.  With TPA, this and future Administrations can negotiate the best trade agreements possible so American workers, farmers, manufacturers and service providers can sell more products overseas and reap the benefits here at home.  

Does ANYBODY Think the WTO's Doha Round Can be Completed?

If you ask, "What's the WTO's Doha Round?" you won't be alone.

Way back in 2001, following 9/11, the World Trade Organization launched the Doha Development Agenda to provide expanded economic opportunities for people in developing countries in part to counter some of the extremism that led to the 9/11 attacks.

Unfortunately, it hasn't worked.

It's hard enough to get all the WTO members to agree on anything.  Compounding that problem is the WTO's requirement that nothing is agreed until everything is agreed.  WTO rules don't allow willing countries to put agreed-to issues into effect, enabling small groups to prevent progress.

Further compounding the problem is the fact that some countries who were viewed as "developing" back in 2001, are anything but that today.  Think India and China, both of which are now major economic powers.

The next WTO meeting of ministers for the Doha Round will be held in December in Bali.  Already, we are seeing the same pre-meeting signs.  Some folks are optimistic that this time will be the one.  Others are wringing their hands saying, "We have to find a way forward."  And this week the trade minister for India said if it doesn't get what it wants in the Doha Round, the WTO's Trade Facilitation Agreement negotiations may be in jeopardy. 

Is it time to just pull the plug and move on?

Ending the Doha Round would be a public relations defeat for the WTO.  But after twelve years of banging our heads against the wall, it's time to stop.

Currently, the WTO has two objectives: (1) complete agreements among its members to expand and facilitate trade among nations, and (2) resolve trade-related disputes among nations and enforce its global rules.

The WTO has a good record on resolving disputes, but it hasn't done well with the first objective. 

It has become clear that the WTO isn't needed when it comes to expanding trading opportunities.  Willing countries are completing agreements among themselves.  The Trans-Pacific Partnership will unite a dozen countries touching the Pacific Ocean into a powerful trading bloc.  Many other countries are negotiating bilateral agreements to boost sales. 

With new leadership at the WTO, it's time to reassess the basic mission.

If WTO is to remain a place for negotiating global trade-enhancing agreements, it must change its requirements for completing them so single countries or small groups cannot halt progress for all.

Otherwise, the WTO will become even less relevant for trade.

I'm Always Optimistic; But Not For a 'No Child Left Behind' Update

As everyone involved with education policy knows, our education law, now in the form of No Child Left Behind, expired in 2007.  Its programs will continue as long as Congress keeps providing the money.

Much in education has changed since 2001 when NCLB was enacted.  Technology in classrooms today wasn't even invented back then.  Learning and teaching methods have improved.

Unfortunately, Members of Congress -- of all political persuasions -- have talked, but haven't acted.

I was optimistic several weeks ago when I heard about legislation actually being written in both the Senate and the House.

But then I saw the bills.  And then I heard the speeches and comments at the Committee hearings.

Our two political parties have grown further apart in the last six or eight years or so.  Ideological purity is demanded by vocal interest groups.  Compromise has become a dirty word.

The partisan discourse is so bad now, that some even are saying that the common standards developed by the states are a federal plot to control what is taught!

Just to be clear, let's look at two facts:

Fact #1: The common standards being implemented by the states were developed by the National Governors' Association and the Council of Chief State School Officers.  (See the theme here? States.)

Fact #2: Math is the same in Columbia, MO, Columbia, MD, and Columbia, SC.  (Why should students in some states know less than students in other states?  Math is math wherever you are.)

So now, because of partisanship and the inability of policymakers to reach across the aisle, our kids suffer.

Our kids are missing out on the new adaptive technology that facilitates individualized instruction so they can move forward in areas they have mastered and get help where they need it. 

Our kids are missing out on new interactive materials and teaching methods.

Instead, they are stuck in a one-size-fits-all classroom, based primarily on their age, gearing up for a fill-in-the-bubble test at the end of the year.

Our students deserve better.

When they complete their secondary education -- whether in Columbia, MO, Columbia, MD or Columbia, SC -- they will be competing with students from all over the world, many of whom will have been using the latest technology and adapting as the education world changes.

We can do better as a nation.

I'm always optimistic.  But I must confess it's getting kinda tough when we're talking about updating our education law to promote student success.

The U.S. Department of Education got tired of waiting for Congress and began giving states money and flexibility in return for adopting preferred policies.  But they can go only so far -- and their program has ruffled some feathers on Capitol Hill and fed into the conspiracy theories.

What's the best way forward for our students?

Partisanship Preventing Progress on ESEA Re-Write

Three weeks ago I noted we were hearing positive signs from Capitol Hill about re-writing and updating our nation's education law -- the Elementary and Secondary Education Act, now in the form of No Child Left Behind.

I was optimistic when Sen. Harkin introduced a bill.  As chairman of the Senate Committee on Health, Education, Labor and Pensions, he is in the prefect position to pass a significant and meaningful update to the law.

Unfortunately, no Republicans signed on in support.

Instead, Republicans in both the Senate and the House introduced their own bills, which are similar to each other.

And no Democrats signed on in support.

We now have Democrats talking about their bill and Republicans talking about their bills.

Unfortunately, they aren't talking to each other.

No Child Left Behind put a system of requirements into place in 2001.  Think of all the changes in education in the past 12 years -- particularly in technology and adaptive learning systems for individualized instruction to improve student performance.

We have heard plenty of talk about the need for updating and modernizing our education system.  It's time for Congress to act.

Good News for Progress on U.S. Trade Agenda

Mike Froman, the President's nominee for U.S. Trade Representative, sailed through his Senate confirmation hearing this week.  Senators from both sides of the aisle said good things about him.

And Froman said good things about the outlook for the U.S. Trade Agenda. 

"If confirmed, I will engage with you to renew Trade Promotion Authority," Froman told the Senators, as reported by Doug Palmer in a Reuters story.  "TPA is a critical tool.  I look forward to working with you to craft a bill that achieves our shared goals."

Trade Promotion Authority is the process that provides for Congress to vote up-or-down on trade agreements with no opportunity for amendments in return for consultations with the Administration along the way during negotiations.

TPA isn't required for completing trade negotiations, but having it in place helps make sure the U.S. gets the best deal, as our counter-parties won't have to hold something back anticipating further demands from Congress.

TPA expired in 2007.  The Obama Administration didn't ask for its renewal during the first term, but now Froman is sending the right message.

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, has said he wants introduce a bill soon and get it passed by Congress this year.

TPA will give U.S. negotiators a useful tool for completing the Trans-Pacific Partnership and the new agreement with the European Union, both of which will provide significant benefits for U.S. workers, as the new agreements will open markets and we will be able to sell more U.S. products and services overseas.

Mike Froman likely will be confirmed fairly quickly as U.S. Trade Representative.  We'll certainly look forward to working with him to renew Trade Promotion Authority.