election 2004 bush vs. kerry. taxes as in 2000, the centerpiece of the bush platform is lower taxes....
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Election 2004Election 2004
Bush vs. KerryBush vs. Kerry
TaxesTaxes
As in 2000, the centerpiece of the Bush As in 2000, the centerpiece of the Bush platform is lower taxes. platform is lower taxes.
Kerry insists that the Bush tax cuts have Kerry insists that the Bush tax cuts have failed and that we need to return to “Fiscal failed and that we need to return to “Fiscal Responsibility” Responsibility”
EGTRRA (2001) and JGTRRA EGTRRA (2001) and JGTRRA (2003)(2003)
Old Tax Code$0 - $26,250: 15%
$26,251 - $63,000: 28%
$63,001 - $132,000: 31%
$132,001 - $288,000: 36%
$288,000 + : 39.6%
New Tax Code$0 - $7,000: 10%
$7,001 - $28,000: 15%
$28,001 - $143,000: 25%
$143,001 - $311,000: 33%
$311,001 + : 35%
EGTRRA (2001) and JGTRRA EGTRRA (2001) and JGTRRA (2003)(2003)
Doubled the child Tax credit from $1,000 Doubled the child Tax credit from $1,000 per child to $2000per child to $2000
Expanded dependant care credit from Expanded dependant care credit from $3,000 to $6,000 per dependant$3,000 to $6,000 per dependant
Lowered marriage penalty Lowered marriage penalty Lowered capital gains tax rate 20% to 15%Lowered capital gains tax rate 20% to 15%Dividends taxed at capital gains rate rather Dividends taxed at capital gains rate rather
than regular income ratethan regular income rateRepeal of the estate taxRepeal of the estate tax
EGTRRA (2001) and JGTRRA EGTRRA (2001) and JGTRRA (2003)(2003)
Due to the political process, these tax cuts Due to the political process, these tax cuts are scheduled to expire after 2010. are scheduled to expire after 2010.
Kerry vs. Bush on TaxesKerry vs. Bush on Taxes
BushMake the existing tax cuts
permanent.
KerryMake the existing tax cut
permanent expect for individuals earning over $200,000
Higher Education Tax Credit (Maximum of $1500)
Health Tax Credits for employers (up t0 75% of health care premiums for small business)
Raise Exemption for Estate tax to $2M
Kerry vs. Bush on TaxesKerry vs. Bush on Taxes
BushMake the existing tax cuts
permanent.
KerryReduce the corporate tax rate
from 35% to 33.25%
Repeal tax deferral on foreign income
Tax Repatriation Holiday (special 10% tax of repatriated foreign earnings)
Targeted New Jobs Tax Credit (Tax credit for small business)
Kerry vs. Bush on Taxes (Year 1)Kerry vs. Bush on Taxes (Year 1)
Cost Cost (Billions)(Billions)
Employment Employment (Thousands)(Thousands)
GDPGDP
(Billions)(Billions)
Disposable Disposable Income per Income per CapitaCapita
BushBush -$38B-$38B +155+155 +$29+$29 $175$175
KerryKerry $7.4$7.4 -74-74 +$10.8+$10.8 -$23-$23
Kerry vs. Bush on Taxes (10 Years)Kerry vs. Bush on Taxes (10 Years)
Cost Cost (Billions)(Billions)
EmploymentEmployment
(Thousands)(Thousands)
GDP GDP (Billions)(Billions)
Disposable Disposable Income per Income per CapitaCapita
BushBush -$1,134B-$1,134B +6,237+6,237 +$669+$669 $4,620$4,620
KerryKerry -$686B-$686B +1,970+1,970 +$369+$369 $3,267$3,267
Taxes and the EconomyTaxes and the Economy
BushBush ClintonClinton AverageAverage
GDP Growth GDP Growth (Inflation (Inflation Adjusted)Adjusted)
2.7%2.7% 3.5%3.5% 3%3%
UnemploymentUnemployment 5.5%5.5% 5.6%5.6% 5.6%5.6%
Employment Employment (Establishment)(Establishment)
-800K-800K +24+24 --------
EmploymentEmployment
(Household)(Household)
+2M+2M +20+20 --------
Taxes and GrowthTaxes and Growth
Taxes and Small BusinessTaxes and Small Business
The vast majority of businesses in the US are small The vast majority of businesses in the US are small businesses: businesses: Less than 20 employees: 84%Less than 20 employees: 84% Less than 50 employees: 95%Less than 50 employees: 95%
While small business makes up a small fraction of total While small business makes up a small fraction of total employment (around 1/3), small businesses experience employment (around 1/3), small businesses experience faster employment growth on average (2.6% per year vs. faster employment growth on average (2.6% per year vs. 1.2%)1.2%)
Small business is the key source of short term Small business is the key source of short term employment fluctuations employment fluctuations
Taxes and Small BusinessTaxes and Small Business Most small businesses fall into one of three categories: Most small businesses fall into one of three categories:
Partnership: 18MPartnership: 18M S Corporation: 3MS Corporation: 3M Sole Proprietorship: 2MSole Proprietorship: 2M
All of these types of businesses are taxed under individual income All of these types of businesses are taxed under individual income Out of the top 5% of the income distribution (6M), 30% are Out of the top 5% of the income distribution (6M), 30% are
small business owners (2M)small business owners (2M) Every 10% increase in the tax rate lowers the probability of a new Every 10% increase in the tax rate lowers the probability of a new
hire by 12%hire by 12%
Kerry’s tax increase would reduce employment by roughly Kerry’s tax increase would reduce employment by roughly 240,000.240,000.
Taxes and EquityTaxes and Equity
Kerry (and many others) have complained Kerry (and many others) have complained that most of Bush’s taxes went to the top that most of Bush’s taxes went to the top 5% of the income distribution. 5% of the income distribution.
In absolute dollar terms, this is true. In absolute dollar terms, this is true. However, the top 5% was paying more However, the top 5% was paying more taxes to begin with!taxes to begin with!
Annual IncomeAnnual Income
9996
25678
43588
68994
147078
253239
500000
0 100000 200000 300000 400000 500000 600000
Lowest Fifth
2nd Fifth
3rd Fifth
4th Fifth
Top Fifth
Top 5%
Top 1%
Share of IncomeShare of Income
4
9
14
23
50
21
10
0 10 20 30 40 50 60
Lowest Fifth
2nd Fifth
3rd Fifth
4th Fifth
Top Fifth
Top 5%
Top 1%
The Bush Tax CutThe Bush Tax Cut
Effective Effective Tax Rate Tax Rate (2000)(2000)
Share Share (2000)(2000)
Effective Effective Tax Rate Tax Rate (2001)(2001)
Share Share (2001)(2001)
Lowest 5thLowest 5th 6.2%6.2% 1.2%1.2% 5.4%5.4% 1.1%1.1%
22ndnd Fifth Fifth 12.8%12.8% 5.3%5.3% 11.6%11.6% 5%5%
33rdrd Fifth Fifth 16.1%16.1% 10.3%10.3% 15.2%15.2% 10%10%
44thth Fifth Fifth 20.1%20.1% 18.7%18.7% 19.3%19.3% 18.5%18.5%
Top FifthTop Fifth 27.3%27.3% 64.4%64.4% 26.8%26.8% 65.3%65.3%
Top 5%Top 5% 30.5%30.5% 37.8%37.8% 30.1%30.1% 38.5%38.5%
Top 1%Top 1% 33.4%33.4% 22.2%22.2% 33%33% 22.7%22.7%
The Bush Tax CutThe Bush Tax CutEffective Tax Effective Tax Rate Rate (Difference)(Difference)
Share Share (Difference)(Difference)
Lowest 5thLowest 5th -.8% -.1%
22ndnd Fifth Fifth -1.2% -.3%
33rdrd Fifth Fifth -.9% -.3%
44thth Fifth Fifth -.8% -.2%
Top FifthTop Fifth -.5% +.9%
Top 5%Top 5% -.4% +.7%
Top 1%Top 1% -.4% +.5%
Taxes and the DeficitTaxes and the Deficit
0
500
1000
1500
2000
2500
1990 1992 1994 1996 1998 2000 2002
-500000
-400000
-300000
-200000
-100000
0
100000
200000
300000
Deficit
Expenditures
Taxes
Taxes and the DeficitTaxes and the Deficit
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
Expenditures(Growth)Taxes (Growth)
Healthcare Healthcare
Bush
Against re-importation of drugs
Kerry
For re-importation of drugs
Prescription Drug PricesPrescription Drug Prices
Prescription drug prices increase by an Prescription drug prices increase by an average 5% per yearaverage 5% per year
By comparison, the overall CPI increases By comparison, the overall CPI increases by an average of 3% per yearby an average of 3% per year
College tuition rises by an average 10% College tuition rises by an average 10% per yearper year
Drugs Represent a Small Portion of the U.S. Health Drugs Represent a Small Portion of the U.S. Health Care Dollar, and Have for 40 yearsCare Dollar, and Have for 40 years
Source: CMS; available at www.cms.gov
Share of National Health Care Spent on Each Category, 1962-2002
Prescription Drugs
Physician &Clinical Services
HospitalCare
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1960 1970 1980 1990 2000
Drug Spending Accounts for Only a Small Drug Spending Accounts for Only a Small Portion of Premium IncreasesPortion of Premium Increases
2003–2004 Forecasted Premium Increasesfor Plans With and Without Rx Coverage
Almost No Difference in Premium Growth for Plans that Do and Do Not Cover RxAlmost No Difference in Premium Growth for Plans that Do and Do Not Cover Rx
Source: Segal Health Plan Cost Trend Survey, 2004 Preliminary Findings edition, November 2003
14.5% 13.6%
0%
5%
10%
15%
20%
With Rx Without Rx
Ave
rage A
cross
Pla
n T
ypes
Cheaper Drugs From Canada, eh?Cheaper Drugs From Canada, eh?
Overall, prescription drugs from Canada Overall, prescription drugs from Canada are 35-55% lower. This can get as high as are 35-55% lower. This can get as high as 60-70% for some of the big names. 60-70% for some of the big names.
Pharmaceutical Prices Vary Pharmaceutical Prices Vary Across the U.S.Across the U.S.
Drug companies do not control retail prices – drugstores Drug companies do not control retail prices – drugstores generally add 20-30% to the prices charged by generally add 20-30% to the prices charged by manufacturers. Because of the large markups, retail manufacturers. Because of the large markups, retail prices can vary widely within towns and states. prices can vary widely within towns and states.
In 2002 and 2003, surveys conducted by public service In 2002 and 2003, surveys conducted by public service offices showed price differentials exist across local offices showed price differentials exist across local pharmacies.pharmacies.
Results are all similar – people can often save as much Results are all similar – people can often save as much or more shopping around in their own towns as they can or more shopping around in their own towns as they can by importing from Canadaby importing from Canada
Example: Within Arizona, Drugstore Prices Can Vary by Example: Within Arizona, Drugstore Prices Can Vary by 50% or More for the Same Prescription50% or More for the Same Prescription
Government Survey of Retail Prices, Arizona, Sept 2002
$0
$50
$100
$150
$200
$250
Alle
gra
Au
gm
en
tin
Bu
sp
ar
Cele
bre
x
Lip
ito
r
Nexiu
m
No
rvasc
Pre
vacid
Sin
gu
lair
Via
gra
Vio
xx
Xan
ax
Zo
co
r
Zo
loft
Low Price Average Price High Price
Source: Update on Prescription Drug Prices Sept 2002, Arizona Attorney General. www.attorneygeneral.state.az.us/pcalc/Prescription%20Drug%20Report%202002.pdf
US Generic Drugs Are CheaperUS Generic Drugs Are Cheaper
In Other Countries, Majority of Potential Savings From In Other Countries, Majority of Potential Savings From Importation Captured by MiddlemenImportation Captured by Middlemen
38%
16%
11%
26%
42%
33%
62%
84%
89%
74%
58%
67%
Netherlands
Germany
UK
Norway
Sweden
Denmark
Home Country Payers and Pharmacies Importers
Source: P. Kanavos, “The Economic Impact of Pharmaceutical Parallel Trade: A Stakeholder Analysis,” London School of Economics, 2004
Share of Economic Gains Captured by Importers vs Payers in Other Countries Where “Reimportation” is Allowed
Price Controls – The Price Controls – The Real DebateReal Debate
Canadian prices for innovative medicines are low for Canadian prices for innovative medicines are low for several reasons – income differences and other demand several reasons – income differences and other demand factors play a role.factors play a role.
However, the main reason why prices are different is However, the main reason why prices are different is because of because of government price controlsgovernment price controls that have been in that have been in place in Canada for over a decade.place in Canada for over a decade.
Price controls are consistent with the single-payer Price controls are consistent with the single-payer Canadian health system. That system is based on Canadian health system. That system is based on rationing care.rationing care.
Importing drugs from Canada is a way to impose Importing drugs from Canada is a way to impose price price controls controls in the U.S. market – rather than passing price in the U.S. market – rather than passing price controls directly, we can import them from Canada. But controls directly, we can import them from Canada. But price controls are not a good way to encourage innovationprice controls are not a good way to encourage innovation..
Price Controls in Canada Lead to Price Controls in Canada Lead to Months-Long Wait for Urgent CasesMonths-Long Wait for Urgent Cases
3.5
3.4
12.4
13.3
6.1
8.1
14.1
20.1
32.3
2.1
0 10 20 30 40 50
Medical Oncology
Radiation Oncology
CardiovascularSurgery
Neurosurgery
Orthopaedic Surgery
Median Wait Time (Weeks) in 2003
Wait from GP to Specialist Wait from Specialist to Treatment
Source: Fraser Institute. Waiting Your Turn: Hospital Waiting Lists In Canada. 2003, Page 47
Median Waiting Time (in Weeks) for Treatment in Canada, 2003
Medicines are No Different – Canadians Have to Wait for New Therapies, Too
86%
78%
73%
58%
53%
52%
36%
31%
Percentage of Global New Medicines Reaching
Country*
Average Delay for Products That Are Launched
(number of months between initial global launch and launch in country)
USA
Germany
Sweden
Spain
France
Italy
Poland
Portugal
4.2
8.8
7.8
15.7
14.9
17.2
20.5
22.1* Percent of 85 global launches 1994–1998 that were launched in each country by end of 1999.Source: Danzon P et al. ”The Impact of Price Regulation on the Launch Delay of New Drugs,” NBER Working Paper 9874, July 2003.
Canada 12.266%
US Consumer
s Get More
Medicines, and Get
Them More
Quickly
Net Cost: $802 Million Invested Over 12-15 Years
5,000–10,000Screened
250Enter Preclinical
Testing
5Enter
Clinical Testing
1
Compound Success Rates by Stage
New Product Development – New Product Development – A Risky and Expensive PropositionA Risky and Expensive Proposition
Source: PhRMA Pharmaceutical Industry Profile 2003, Chapter 1: Increased Length and Complexity of the Research and Development Process. And DiMasi, JA, Hansen, RW, Grabowski, HG. “The Price of Innovation: new estimates of drug development costs.” J of Health Economics. 2003:22:151-185.
Approved by the FDA
FDA Review Approval
Phase II100–300 Patient Volunteers Used to Look for Efficacy and Side Effects
Preclinical TestingLaboratory and Animal Testing
16
14
12
10
8
6
4
2
0
Discovery(2–10 Years)
Phase I 20–80 Healthy Volunteers Used to
Determine Safety and Dosage
Phase III1,000–5,000 Patient Volunteers
Used to Monitor AdverseReactions to Long-Term Use
Additional Post-Marketing Testing
YearsYears
Source: IMS Health
As a Practical Matter, (Current) Canadian Drug Supply Too As a Practical Matter, (Current) Canadian Drug Supply Too Small to Have a Real Impact in the USSmall to Have a Real Impact in the US
Total Prescriptions Filled in US vs. Canada, in Millions - 2002
0
500
1,000
1,500
2,000
2,500
3,000
3,500
US Canada
0
500
1,000
1,500
2,000
2,500
3,000
3,500
US Canada
>3.4 Billion
331 Million
After exhausting all Canadian supplies, still would need to supply medicines for
3.1 billion prescriptions
Will Re-importation lower costs?Will Re-importation lower costs?
Current estimates suggest that re-importation Current estimates suggest that re-importation will lower aggregate spending on prescription will lower aggregate spending on prescription by $40B over the next 10 years (a 1% by $40B over the next 10 years (a 1% decrease)decrease)
Will Re-importation affect safety?Will Re-importation affect safety?
Each country has an agency overseeing Each country has an agency overseeing drug manufacturing (FDA). Some drug manufacturing (FDA). Some countries have higher standards than the countries have higher standards than the US, some have lower. US, some have lower.
Safety Issues Cannot Be Safety Issues Cannot Be Ignored Ignored
State of Minnesota sent inspectors to identify State of Minnesota sent inspectors to identify good sources for Minnesotans to use to get good sources for Minnesotans to use to get Canadian drugsCanadian drugs
Inspectors announced visits in advance – and Inspectors announced visits in advance – and chose places already doing business with the US chose places already doing business with the US in large numbersin large numbers
Inspectors found major problems, including:Inspectors found major problems, including: Medicines requiring refrigeration – like insulin – being shipped without itMedicines requiring refrigeration – like insulin – being shipped without it Medicines being shipped with no labels, potentially risking patient livesMedicines being shipped with no labels, potentially risking patient lives Stores with no recall procedures in place or requiring patients to sign away Stores with no recall procedures in place or requiring patients to sign away
all of the drugstore’s liability in case of errors or other problemsall of the drugstore’s liability in case of errors or other problems Stores shipping and storing medicines that had been returned by other Stores shipping and storing medicines that had been returned by other
customerscustomers
HealthcareHealthcare
Currently, there are approximately 45M Currently, there are approximately 45M Americans without Heath InsuranceAmericans without Heath InsuranceCan’t afford it (unemployed) Can’t afford it (unemployed) Employer doesn’t provide it (Small business)Employer doesn’t provide it (Small business)Choose not to have itChoose not to have it
HealthcareHealthcareKerryKerry
Expand eligibility for Medicaid Expand eligibility for Medicaid and SCHIPand SCHIP
Cover kids up to 300% of Cover kids up to 300% of federal poverty level (FPL)federal poverty level (FPL)
Cover parents of kids up to Cover parents of kids up to 200% of FPL200% of FPL
Cover all others up to 100% Cover all others up to 100% of FPLof FPL
Kerry “swap”Kerry “swap” Federal government Federal government
assumes all costs for assumes all costs for children in Medicaid in children in Medicaid in exchange for states exchange for states expanding SCHIPexpanding SCHIP
BushBush Tax creditsTax credits
Tax credit of up to $3,000 per Tax credit of up to $3,000 per family/$1,000 per individualfamily/$1,000 per individual
Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 insurance contribution/$2,000 insurance ($300/$700 for individuals) ($300/$700 for individuals)
Non means-tested credit for Non means-tested credit for small businesses that set up small businesses that set up HSAsHSAs
Tax deduction for high-deductible Tax deduction for high-deductible insuranceinsurance Individuals who purchase low-Individuals who purchase low-
premium, high-deductible premium, high-deductible insurance policies can deduct insurance policies can deduct premium from taxable incomepremium from taxable income
HealthcareHealthcareKerryKerry
Federal government would Federal government would reimburse employer insurance reimburse employer insurance plans for 75% of per person plans for 75% of per person costs that exceed a thresholdcosts that exceed a threshold
Threshold set so that Threshold set so that savings average 10 percent savings average 10 percent
Threshold= $36,000 in Threshold= $36,000 in 2006 (AEI), $30,000 2006 (AEI), $30,000 (Kerry campaign)(Kerry campaign)
To qualify, employers and To qualify, employers and insurers would have to: insurers would have to:
provide health insurance provide health insurance to to allall employees employees
adopt disease adopt disease management programsmanagement programs
pass all savings along to pass all savings along to employeesemployees
BushBush Tax creditsTax credits
Tax credit of up to $3,000 per Tax credit of up to $3,000 per family/$1,000 per individualfamily/$1,000 per individual
Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 contribution/$2,000 insurance ($300/$700 for insurance ($300/$700 for individuals) individuals)
Non means-tested credit for Non means-tested credit for small businesses that set up small businesses that set up HSAsHSAs
Tax deduction for high-Tax deduction for high-deductible insurancedeductible insurance Individuals who purchase Individuals who purchase
low-premium, high-low-premium, high-deductible insurance policies deductible insurance policies can deduct premium from can deduct premium from taxable incometaxable income
HealthcareHealthcareKerryKerry
Plans with FEHBP contracts would Plans with FEHBP contracts would offer similar plans to all comersoffer similar plans to all comers
Premium would depend on Premium would depend on risks of enrolleesrisks of enrollees
Separately priced from FEHBP Separately priced from FEHBP planplan
Tax subsidies for purchasing Tax subsidies for purchasing coverage through the CHPcoverage through the CHP
BushBush Tax creditsTax credits
Tax credit of up to $3,000 per Tax credit of up to $3,000 per family/$1,000 per individualfamily/$1,000 per individual
Some will take as $1,000 HSA Some will take as $1,000 HSA contribution/$2,000 contribution/$2,000 insurance ($300/$700 for insurance ($300/$700 for individuals) individuals)
Non means-tested credit for Non means-tested credit for small businesses that set up small businesses that set up HSAsHSAs
Tax deduction for high-Tax deduction for high-deductible insurancedeductible insurance Individuals who purchase Individuals who purchase
low-premium, high-low-premium, high-deductible insurance policies deductible insurance policies can deduct premium from can deduct premium from taxable incometaxable income
HealthcareHealthcare
Why is health insurance tied in with Why is health insurance tied in with employment?employment?ConvenienceConvenienceTaxesTaxesRisk PoolingRisk Pooling
HealthcareHealthcare
The Kerry plan is superior to Bush in that it The Kerry plan is superior to Bush in that it pools small business into one grouppools small business into one group
However, it still keeps provision of benefits However, it still keeps provision of benefits at the employer levelat the employer levelHealthcare decisions should be made by Healthcare decisions should be made by
individuals rather than employersindividuals rather than employersSmall businesses do not have a comparative Small businesses do not have a comparative
advantage in negotiating with insurance advantage in negotiating with insurance companiescompanies
Tax benefits are regressiveTax benefits are regressive
An AlternativeAn Alternative
A hybrid of Bush/Kerry would be bestA hybrid of Bush/Kerry would be bestOffer tax credits to lower income households Offer tax credits to lower income households
(refundable) for the purchase of healthcare (refundable) for the purchase of healthcare insurance.insurance.
Pool small businesses and individuals into Pool small businesses and individuals into larger groups larger groups
Allow employers to facilitate health insurance, Allow employers to facilitate health insurance, but no actually supply itbut no actually supply it
Costs & Impact (Kerry)Costs & Impact (Kerry)
Newly Insured 27 MNewly Insured 27 M 25 M 25 M 26 M 26 M
$1,520$1,249
$653
0
400
800
1200
1600
$ B
illio
ns
AEI Lewin Thorpe
Costs & Impact (Bush)Costs & Impact (Bush)
Newly Insured 7 MNewly Insured 7 M 8 M 8 M 2 M 2 M
$129
$166
$91
0
50
100
150
$ B
illio
n
AEI Lewin Thorpe
EducationEducation
During his first year in office, George Bush During his first year in office, George Bush signed into law “No Child Left Behind” (NCLB)signed into law “No Child Left Behind” (NCLB) States required to set reasonable standards for math States required to set reasonable standards for math
and English. States will use annual testing for grades and English. States will use annual testing for grades 3-8. States with low performance are subject to 3-8. States with low performance are subject to corrective action.corrective action.
Schools subject to corrective action must give Schools subject to corrective action must give students the opportunity to attend other schools (and students the opportunity to attend other schools (and must provide transportation)must provide transportation)
EducationEducation
Kerry
Essentially, Kerry wishes to “Fully Fund” NCLB by increasing federal spending on education by $30B. The goal is to hire 500,000 new teachers.
Bush
Continue to implement NCLB (This would amount to increasing federal spending by $6B (Budget projections)
Federal Education SpendingFederal Education Spending
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1993 1996 1999 2002 2005estimate
2008estimate
Federal Education SpendingFederal Education Spending
0
5000
10000
15000
20000
25000
30000
35000
40000
1962 1967 1972 1977 1982 1987 1992 1997 2002 2007estimate
Education SpendingEducation Spending
Financing education is largely a state issue. Financing education is largely a state issue. Last year, the federal government spent around Last year, the federal government spent around $30B on education. This is approximately 3.5% $30B on education. This is approximately 3.5% of total spending on education ($850B)of total spending on education ($850B)
We are currently spending approximately $8,000 We are currently spending approximately $8,000 per student. per student.
Spending per student has increased Spending per student has increased approximately 400% since 1970 (about 11% per approximately 400% since 1970 (about 11% per year)year)
Most of this is aimed at lowering class sizeMost of this is aimed at lowering class size
Education SpendingEducation Spending
Does money influence educational Does money influence educational outcomes?outcomes?
AlternativesAlternatives
School VouchersSchool VouchersCharter SchoolsCharter SchoolsStronger AccountabilityStronger Accountability
Energy PolicyEnergy Policy
The US imports 9.4M barrels of oil per The US imports 9.4M barrels of oil per day. (roughly 50% of total consumption)day. (roughly 50% of total consumption)
This costs $60B per yearThis costs $60B per year
US Oil ImportsUS Oil Imports
Demand/SupplyDemand/Supply
While we are still below the record high While we are still below the record high demand of 1978 (18.8M barrels per day), demand of 1978 (18.8M barrels per day), demand has grown significantly since demand has grown significantly since 1980 (15.2M barrels/day)1980 (15.2M barrels/day)
Supply has gradually declined since its Supply has gradually declined since its early 1970 peak of 11.3M barrels/day)early 1970 peak of 11.3M barrels/day)
Demand/SupplyDemand/Supply
US Net Demand is Modest in US Net Demand is Modest in Global TermsGlobal Terms
Most of US oil imports come from a Most of US oil imports come from a small set of countriessmall set of countries
Imports are shifting to South Imports are shifting to South AmericaAmerica
Half of US Imports come from 3 Half of US Imports come from 3 countriescountries
What to do?What to do?
Increase Demand Increase Demand Reduce SupplyReduce Supply
Energy PolicyEnergy Policy
KerryAgainst ANWR drilling as well as
other environmentally sensitive areas
Royalties from oil/gas extraction to go towards energy R&D
Increase CAFÉ standard to 40mpg
Tax Credits for hybrid vehicles
BushIncrease domestic oil production
including ANWR
$1.7B for Hydrogen fuel cell research
Against increasing fuel efficiency standards
Tax Credits for hybrid vehicles