California is expected to record a $16 billion deficit this year (LATimes). Earlier this year, Governor Jerry Brown submitted a state budget with a deficit of $9.2 billion. Since that time, tax receipts have fallen below estimates, courts have invalidated proposed cuts to healthcare, and the legislature has not aggressively pursued further cuts. At a press conference today, Brown is expected to call for deeper cuts and continue to support a ballot initiative to raise taxes (Reuters).
As the United States continues to run budgets with high deficits, politicians debate different plans to reduce government costs and to raise revenue. This CFR Backgrounder by Jonathan Masters outlines the competing policy paths on federal fiscal reform, and the global consequences for failing to bring down U.S. debt.
Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.
Education and Human Capital
STEM Student Visas Broaden
New visa rules will allow more foreign STEM students in U.S. schools to claim a temporary visa (Dept. of Homeland Security). The newly accepted degree programs include pharmaceutical science, econometrics, and quantitative economics. STEM graduates in eligible fields of study can receive a 17-month visa extension after graduation to find work in the United States.
CFR’s 2009 Independent Task Force on U.S. Immigration Policy recommends policies with three goals: reform of legal immigration to improve efficiency and U.S. competitiveness; effective enforcement of immigration laws; and a fair, humane, and orderly way to deal with migrants illegally living in the United States.
Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.
Chicago Leads on Infrastructure
Chicago Mayor Rahm Emanuel argues in an opinion piece in Politico that cities nationwide should invest in infrastructure. “What is true for Chicago is true for cities nationwide: By neglecting to invest in our infrastructure for nearly four decades, we have allowed our foundations to decay and our strengths to decline. If we don’t take action, Chicago will face another lost decade.”
Chicago’s broad $7 billion infrastructure plan and its innovative public-private partnership vehicle, The Chicago Infrastructure Trust, were the focus of Steven J. Markovich’s inaugural Policy Initiative Spotlight.
Infrastructure. Read more on how upgrading the nation’s aging network of roads, bridges, airports, railways, and water systems is essential to maintaining U.S. competitiveness.
New York Becomes a Technology Center
The New Tech City report found that New York City has passed Boston to become the number two technology startup hub (NYT). While Boston continues to lead NYC in biotech and cleantech, New York’s technology sector leverages the city’s strengths in advertising, finance, and creative content providers. However, growth is concentrated geographically in Midtown and Lower Manhattan because broadband internet infrastructure is limited in other areas of the city.
Facebook Co-founder Renounces U.S. Citizenship
Eduardo Saverin, Facebook co-founder, has renounced his U.S. citizenship (BusinessWeek). His stake in Facebook could be worth an estimated $3.8 billion after the initial public offering and renouncing his citizenship allows him to reduce his IRS tax bill. He became a resident of Singapore, which has no capital gains tax for individuals. The Brazilian born tech leader moved to the United States in 1992 and became a citizen in 1998. Last year, 1,780 Americans renounced their citizenship, up from 235 in 2008.
Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.
The Morning Brief is compiled by Renewing America contributor Steven J. Markovich.