President Obama signed into law an extension of the Export-Import Bank (NYT), passed by Congress with bipartisan support on May 15.  The measure extends Ex-Im’s charter to September 2014 and raises the bank’s lending limit from $100 billion to $140 billion over three years.  Critics have argued that Ex-Im distorts markets and effectively subsidizes exports while exposing taxpayers to default risk (WSJ).  Proponents point to Ex-Im’s profitability, and see it as a counterbalance to foreign subsidies; as Obama put it: “As long as our global competitors are providing financing for their exports, we’ve got to do the same.” Read more »

The Washington Post reports that Secretary of Education Arne Duncan announced eight more states received waivers from No Child Left Behind (NCLB) requirements. This brings the total number of states to receive waivers to nineteen; seventeen other states plus Washington, DC have applications under review. Duncan argued that Congress’ stalled efforts to rewrite NCLB over the past five years necessitated the waiver process: “We prefer a bipartisan rewrite of No Child Left Behind. Obviously, that’s not where Congress is right now. . . . Children can’t wait. Teachers can’t wait. We’re moving forward right now.” Read more »

The gaps in the U.S. social safety net are about to become very large holes. For the past several years, lawmakers have repeatedly voted to extend unemployment insurance benefits, most recently in February. But in many states those benefits are running out, leaving the long-term unemployed with choices that range from bad to awful. Read more »

New research indicates that the bulk of the pay premium enjoyed by workers in developed nations is from a difference in location, not skills (BusinessWeek). Workers in the United States enjoy a “place premium”—even after adjusting for purchasing power—due to public goods such as infrastructure, a developed financial system, and reliable regulations and laws. This location effect accounted for three-quarters of the difference in average pay between U.S. software workers and Indian counterparts. It also explains why an Indian McDonald’s employee can only afford one-third of a Big Mac after an hour of work, while an American worker can buy two. Read more »

China responded to the recently imposed 31 percent U.S anti-dumping tariffs on imports of Chinese solar panels with investigations into U.S. clean energy projects (WSJ). China’s Commerce Ministry alleges six projects in five states violated international trade law, and Beijing has stated that the tariffs reflect “the U.S.’s tendency toward trade protectionism.” The heads of four major Chinese solar power manufacturers have banded together to refute the determination of the U.S. Commerce Department. Read more »

Mitt Romney, the presumptive GOP presidential nominee, gave a major policy speech yesterday outlining his educational priorities (NYT). The candidate argued that disparate educational opportunities—with minorities disproportionately relegated to failing schools—is the “civil-rights issue of our era.” He embraced school choice and proposed a federal voucher-like system for low-income students, and also called for increasing school performance transparency so parents can avoid failing schools. Education has not been a major issue for presidential campaigns since 2000, but analysts noted this speech was given at the Latino Coalition’s Annual Economic Summit, and see an opportunity for Romney to attract Hispanic voters. Read more »

Over the years, advanced and developing countries have experimented, sometimes deliberately and frequently inadvertently, with a variety of approaches to growth. Unfortunately, many of these strategies have turned out to have built-in limitations or decelerators – what one might call elements of unsustainability. And avoiding serious damage and difficult recoveries requires us to get a lot better at recognizing these self-limiting growth patterns early on. Read more »

The nonpartisan Congressional Budget Office (CBO) predicts that the “fiscal cliff” of over $500 billion in spending cuts and tax increases scheduled under current law will cause a recession in the first half of 2013. The CBO argues that Congress should reduce these fiscal changes to prevent recession while enacting specific, long-term measures to put federal finances on a stable course—a view shared by Peter Orszag, former CBO director and current CFR Adjunct Senior Fellow. The Committee for a Responsible Federal Budget has a quick summary of the scheduled spending cuts and the tax increases. Read more »

Should more Americans go to college? I would have thought the answer is an unequivocal yes. The evidence is overwhelming that college graduates have lower unemployment rates, earn far more money, and are generally healthier and happier than those with a high school education or less. And young people seem persuaded. College enrollment rates for high school grads have risen from 44 percent in 1989 to nearly 60 percent last year. Read more »

The Department of Education is expected to release new draft regulations for grant proposals for the latest round of Race to the Top funds (Education Week). The new guidelines for receiving one of the fifteen to twenty four-year grants from the $400 million program include: instruction tailored to individual students, incorporating student data into district superintendent evaluation, and the proposal’s “vision” for improving performance and narrowing achievement gaps. Read more »