us election briefs 2016

US election briefs 2016The Supreme Court . Fiscal policy . Climate change . Student loans

Infrastructure . Education . Foreign policy

Briefing Title to come The Economist April 25th 2012

The issues that must be faced

Policy has not been much discussed in this presidential election. Here are our attempts to fill the vacuum

WHEN Americans cast their votes for the next president, the policy platforms of Hillary Clinton and Donald Trump will probably not be

right at the front of their minds. That is true even in a more normal cycle than this one has been. Voters generally pay more attention to intangible things, like a candidate’s character or manner, than they do to tax plans. It is even more true this time around. Mr Trump has broken with tradition by declining to release much in the way of detailed policy before the election. Nor does he rely much on advisers, whose views can be interpreted as matching the candidate’s own.

That is not to say that the candidates have no ideas, though, or that policy is any less important this time. What the next president intends to do self-evidently matters a great deal. And America faces a clear, strark choice in policy terms in 2016. Mrs Clinton has detailed plans for what her administration would like to do if she wins. The hacks of her campaign e-mails have increased our understanding of how she thinks. Mr Trump’s policies may be short on detail, but the direction he would like to take the country in could not be clearer.

In this series of policy briefs, we look at what the two candidates propose on seven key issues: the Supreme Court, fiscal policy, the environ-ment, student loans, infrastructure, education and foreign policy. There are other areas to consider, but we decided to look at policy areas where the federal government has real clout, or where the candidates’ positions seemed farthest apart and most consequential.

Depending on the makeup of the new Congress, some of these ideas will remain as aspirations, whoever wins. Presidents are more limited in the area of domestic policy than nominees suggest while on the campaign trail, when they like to pretend that the legislative branch does not exist. They are less constrained in foreign policy, the final article in the series. Here the choice between the two candidates is greatest. We have tried to pay as much attention to ideas as to groping and e-mail servers when making our minds up about the candidates. These briefs are a concise attempt to show our working, in what many people agree is the most divisive presidential election for decades.

2US election briefs The Economist

The Supreme Court4 About to tilt

This election could determine the shape of the court for a generation

Fiscal policy5 Money’s the conversation

Hillary Clinton’s fiscal plan is fiddly. Donald Trump’s is absurd

Climate change6 Notes from the undergrowth

Hillary Clinton’s environmental plans are pragmatic. Donald Trump’s are

non-existent

Student loans7 More present than correct

Hillary Clinton’s college-funding plan is better politics than policy

Infrastructure8 A view from the bridge

It will take more than just money to get America moving

Education9 Little changes

George W. Bush and Barack Obama made school reform a priority. The next president will look elsewhere

Foreign policy 10 World shaking

Hillary Clinton’s foreign policy would be similar to Barack Obama’s. Donald Trump’s would be like nothing America has seen before

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“OUR country is going to beVenezuela,” Donald Trumpsaid over the summer, if Hil-lary Clinton gets to nominateSupreme Court justices. Her

picks will be “so far left,” Mr Trump said,that America will slide into socialism. Forher part, Mrs Clinton says the Republicannominee’s Supreme Court appointmentswould threaten the “future of our planet”,among other things. Melodramatic cam-paigning is nothing new, and the SupremeCourt is an issue every four years. But withRepublicans in the Senate refusing to con-sider Barack Obama’s choice of MerrickGarland to fill the late Antonin Scalia’sseat—and the remaining eight justices di-vided and a bit flummoxed in the mean-time—this go-round is different. Change iscoming, in one direction or another.

Both camps say that the next presidentcould appoint as many as four justices (MrTrump once said five), including a replace-ment for the very conservative Mr Scalia.These predictions are a rather morbid nodto demographics: Ruth BaderGinsburg, thelongtime leader of the court’s left wing, is83. The slightly less liberal Stephen Breyeris 78, and Anthony Kennedy, sitting in theideological middle ofthe bench, is 80. Eachof the four most recent presidents has seat-ed two justices, so having the chance toname four would give the next WhiteHouse an outsize influence on the shape ofAmerican law for a generation. Yet even ifthese three jurists, along with their fiveyounger colleagues, muster four moreyears in their robes and the number of va-cancies stays at one, the next president willstill help determine the shape of the Su-preme Court for years.

The octogenarians are showing fewsigns of slowing down. The cherubic MrKennedy is still prone to syrupy prose earlyin his ninth decade. Despite herbouts withcancer and an occasional nap during aState of the Union address, Mrs Ginsburgdoes 20 push-ups a day, pulls all-nightersand remains ruthless when pepperinglawyers during oral arguments. If any-thing, she is gathering steam. Her fellowBill Clinton appointee, MrBreyer, spins im-promptu hypotheticals that box advocatesinto their own illogic. His health scares?Just a few broken bones and a puncturedlung suffered during bicycling accidents.

If they stay put for the next four years,the balance of the court will turn on theidentity of the next appointee. There are

three possibilities. The Senate may relentafterNovember8th and considerPresidentObama’s nominee, Mr Garland. In 1996,when Mr Garland was nominated by BillClinton to sit on the District of ColumbiaCourt of Appeals, he garnered praise frommany Republicans. Senator Orrin Hatchcalled him “a fine nominee” whose “intel-ligence and…scholarship cannot be ques-tioned”. Charles Grassley, the judiciarycommittee chair who has stonewalled MrGarland’s high-court nomination for a re-cord-breaking 184 days (Louis Brandeis,now in second place, had a 125-day wait in1916), said two decades ago that the sameman was “well-qualified”. After a pledgeof no hearings before the next presidenttakes office, Mr Grassley is now hedging.

FilibustBut if Mr Garland continues to languish inno-man’s-land, everything will hang onwhat happens in November. Mr Trumphas released a list of deeply conservativejudges whom he would consult when fill-ing vacancies. If Mrs Clinton wins, her de-cision on whether to resubmit Mr Garlandor tap her own nominee may depend onwhich party controls the Senate. If theDemocrats retake the chamber, she may beemboldened to choose someone youngerand more liberal.

Undercurrent Senate rules, nobody toofar to the left or the right will stand a

chance. But since neither party seems like-ly to have the 60 votes necessary to staveoff interminable filibusters, the days ofthatvenerable (ifdiminished) Senate tradi-tion may be numbered—at least with re-gard to Supreme Court appointments.Richard Primus, a law professor at the Uni-versity of Michigan, notes that the filibus-ter “relies on a kind of comity and mutualregard” between Republicans and Demo-crats that “unfortunately…is just gone”.The outgoing Senate minority leader, Har-ry Reid, agrees: “What choice wouldDemocrats have? The country can’t be runthis way, where nothing gets done.” Pri-vately some Republican senators say that,whoever wins, the filibuster will go.

While they await a ninth colleague,some justices lament their existential bind.“Eight…is not a good number for a multi-memberCourt”, Mrs Ginsburgsaid in May.That same month, Mr Breyer downplayedthe worry, observingthat the court is unan-imous about half of the time and finds it-self closely divided in only a handful ofcontroversial cases. The chief justice, JohnRoberts, has doubled down on his pen-chant for narrow rulings that change as lit-tle as possible. Consensus, he says, is “notsomething I can do on my own”.

On fouroccasions in the spring—includ-ing in controversial cases on union duesand deporting undocumented migrants—the justices’ attempt to find commonground failed, resulting in a split of 4-to-4.A tie means that the ruling in the court be-low stands but has no value as a precedentand does not bind other courts. The jus-tices also unanimously sent a case on reli-gious freedom and contraception back tothe lower courts with orders to encouragethe parties to “resolve any outstanding is-sues”. Like exasperated parents unwillingto adjudicate a settlement for warring chil-dren, the Supreme Court simply told theparties to work things out. This strategy ofavoidance now passes for jurisprudence.

Aware of the Senate’s inaction acrossthe street, the justices seem stuck in stand-by mode. The docket for their upcomingterm is looking wan, with fewer cases andless controversy than the court has seen ina long time. Contentious cases involvingreligious liberty and property rights haveyet to be scheduled for oral argument, ap-parently in the hopes that a ninth justicemight be seated in the spring.

The Supreme Court cannot fend offcontroversy for long, though. Fights overpresidential power, administrative leeway,freedom of speech, abortion, race, religionand discrimination against gays and lesbi-ans—to name a few—are sure to arrive atthe justices’ doorsteps. Mr Primus notesthatwith the court totteringon an ideologi-cal divide, it takes only one newcomer topush it left or right. “It’s a hinge”, he says,“on which the direction of constitutionallaw could turn for decades”.7

About to tilt

NEW YORK

This election could determine the shape ofthe court fora generation

The big reveal

Issue Date: 17-09-2016 Zone: UKPB Desk: UnitedStates Output on: 15-09-2016----09:19 Page: US5 Revision: 0

4 US election briefs The Supreme Court The Economist


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FISCAL policy has tumbledfrom the top of the politicalagenda with remarkablespeed. For most of BarackObama’spresidency, control-

ling the national debt, which spiked from35% of GDP to over 70% after the recession,was a priority for Republicans. Democratswere less worried, but still saw the needfor America to fix its long-run challenge:soaring spending on Medicare (publichealth insurance for the over-65s) and So-cial Security (public pensions). Mr Obamaset up a doomed bipartisan commissionwith the task of doing just that. Yet in thiselection, the Republicans have abandonedtheir fiscal hawkishness. And the long-runbarely gets a look-in.

That is not all down to Donald Trump.The economic recovery, combined withsharp cuts to spending (triggered by thefailure to reach a deficit-reduction deal)have reduced borrowing significantly,from 9.8% ofGDP in 2009 to 2.5% in 2015 (in2016 it will be a little higher). Republicansin Congress—which, unlike the president,actually writes the budget—have also hada change of heart. Their economic priorityis now to boost growth by cutting taxesand red-tape, which they blame for theslow recovery from the financial crisis.Faster growth, they say, would lead tohealthier public finances.

Mr Trump has assumed that cause withgusto. He promises to raise economicgrowth to 3.5% oreven 4%, up from an aver-age of 2.1% since the end of the recession.But he also pledges extra spending, on in-frastructure, veterans, education, childcare and so on, as well as defence, a moreusual GOP priority. Mr Trump is impreciseabout numbers. But his expansion of themilitary would alone cost $450 billionovera decade, says the Committee for a Re-sponsible Federal Budget (CRFB), a fiscallyhawkish think-tank. (For comparison, to-day’s total national debt is about $14 tril-lion, or 77% ofGDP.)

Big spending on top of tax cuts hastransformed an unrealistic agenda into afantasy. Start with the growth predictions.America is growing slowly in part becausebaby-boomers are retiring. The populationaged 25-54 will grow by just 0.3% a year un-til 2024, compared with 0.9% between 1994and 2004. Mr Trump promises to create25m new jobs, presumably over twoterms—20m more than is forecast today. Itis not clear who would fill these vacancies.

Restoring the labour-force participation ofprime-age workers to its record high wouldunearth only 4.3m new workers. Toachieve rapid growth Mr Trump would in-stead need productivity growth to average2.6%, says the CRFB, a level not reached inany ten-year period in modern history.

Even conservative economists see this.Growth of only 2.8% would call for a “goldmedal”; reaching just 3% would put MrTrump in the “hall of fame”, says DouglasHoltz-Eakin, who ran the CongressionalBudget Office for two years under GeorgeW. Bush. The Tax Foundation, a non-parti-san think-tank, reckons tax cuts can signifi-cantly boost growth, but still says that MrTrump’s tax plan would cost $2.6 tril-

lion-3.9 trillion over a decade. Mr Trump promises to free up funds by

lopping1% a year off the roughly one-thirdof the budget that is left after defence, So-cial Security and Medicare. This adds up toa 29% real-terms cut over a decade to bud-gets that have already been slashed since2011. Even assuming he manages this, andthat there is no new infrastructure spend-ing, the CRFB reckons Mr Trump wouldsend the national debt soaring to 105% ofGDP by 2026 (see chart). And this is beforeaccounting for growth, which, in spite ofMr Trump’s tax and regulatory policies,would probably fall as a result ofhis immi-gration crackdown and trade barriers.

Mr Trump has launched his tax plansthree times, yet they remain vague. At first,he promised to tax income from smallfirms, which are usually treated like anyother earnings, at a maximum rate of 15%.After many analysts noted that this mightcause high-earners to masquerade assmall-businesses, the policy disappeared.

Ithad been dropped, the campaign told theTax Foundation, before promising thesmall-business lobby that it remains.

Finally, the plan is steeply regressive.The incomes ofthe poorest rise by1-8% (de-pending on growth effects, and on small-business taxes). But thanks to a whackingcut to the top rate of tax, from 39.6% to 33%,the incomes of the top 1% ofearners wouldsurge by10-20%. YetMrTrump claims, inex-plicably, that a couple earning $5m a yearwould see a tax cut of just 3%.

Compared with such a shambles, it isobvious that Hillary Clinton’s policies aremuch more serious. But that is not thesame as saying they are desirable.

Mrs Clinton, whose pledges are preciseenough to be quantified, wants newspending totalling about $1.7 trillion over adecade. Her best ideas concern infrastruc-ture, on which she would spend an extra$250 billion. A further $25 billion wouldcapitalise a federal infrastructure bank.This would lend $250 billion to projectsthat can make a return, such as toll bridges.(Mr Obama has tried to set up such a bank;32 states already have their own.)

Many other programmes make up theother spending. Having been pushed left-ward on the issue by Bernie Sanders, MrsClinton would guarantee that by 2021households earning less than $125,000 payno tuition fees at public universities intheir states. She would cap child-care costsat 10% of income, fund paid parental leaveand create tax-credits to encourage firms toshare their profits with workers, hire ap-prentices and invest in manufacturing.

Mrs Clinton promises to pay for all thiswith a combination of higher taxes on therich—for example, an additional 4% tax onincomes over $5 million. She has also pro-posed various new taxes on business, suchas a fee on big banks. Her plan very nearlyfunds itself, according to the CRFB.

The Clinton agenda, though, is too com-plicated. America’s clunky tax and welfaresystem needs simplification, not endlessnew deductions, credits and phase-outs.American businesses take 175 hours peryear to comply with all taxes, comparedwith 110 hours in Britain. Complexity ishardly unique to Mrs Clinton’s policies: itis a product of America’s incrementalismand lobbying. But it is still unwelcome.

To the extent that the candidates do talkabout America’s longer-term fiscal woes,Mrs Clinton is the more credible. For in-stance, she promises to expand the Afford-able Care Act’s fledgling cost-saving ex-periments in Medicare. Yet because thetrust fund for Medicare runs dry only in2028, and the Social Security fund only in2034, this issue will only really grab politi-cians—and electorates—later. Mr Trump isnot interested; Mrs Clinton, for once, notscrutinised. America would be best-served by a rigorous contest of economicideas. It is not getting that. 7

Money’s the conversation

WASHINGTON, DC

HillaryClinton’s fiscal plan is fiddly. Donald Trump’s is absurd

The king of debt

Source: Committee for a Responsible Federal Budget

National debt under central estimate of candidates’ proposals, as % of GDP

60

70

80

90

100

110

2010 12 14 16 18 20 22 24 26

HillaryClinton

Donald Trump

Under current law


5US election briefs Fiscal policy The Economist


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DESPITE deluges in theSouth, droughts in the Westand fires throughout nation-al forests this year, the words“climate” and “change” have

seldom been uttered together on the cam-paign trail. Fifteen of the 16 hottest years onrecord have occurred since 2000. Yet Do-nald Trump has claimed that global warm-ing is a Chinese hoax designed to thwartAmerican businesses (he also denied say-ingso at the first debate between the candi-dates, on September 26th). Hillary Clintonbelieves that “climate change is real” andthat dealing with it will create jobs in therenewable-energy sector. In sum, the twocandidates offer completely different envi-ronmental platforms.

Uncoupling emissions growth and eco-nomic expansion is important to slowingclimate change. Total energy consumptionin America has dropped 1.5% since BarackObama became president, according to theWhite House; in that time the economyhas swelled by 10%. America now gener-ates more than three times as much elec-tricity from wind, and 30 times as muchelectricity from solar, as it did eight yearsago.

Most voters accept that climate changeis happening. But Republicans and Demo-crats disagree as to why, according to theYale Programme on Climate Change Com-munication, a research group. Half of MrTrump’s supporters reckon natural causesexplain it, whereas three in four of MrsClinton’s backers say, with almost all cli-mate scientists, that man-made emissionsare to blame.

In 2015 the most robust deal yet on curb-ing global carbon emissions emerged. TheParis Agreement aims to limit globalwarming to “well below” 2oC above pre-industrial temperatures. For its part, Amer-ica promised to lower its emissions of car-bon dioxide by 26-28% by 2025, as mea-sured against the levels of2005.

An important step to achieving thisgoal was unveiled last year: the Clean Pow-er Plan. This proposes the country’s firstnational standards to limit carbon-dioxideemissions from power plants—America’slargest source of greenhouse gases. Legalchallenges from fossil-fuel groups and twodozen mostly Republican-led states sawthe Supreme Court put it on hold eightmonths ago. Some opponents argue theplan is unconstitutional; far strongerclaims are made that the Environmental

Protection Agency (EPA) is overstepping itsremit. Hearings on the plan began on Sep-tember 27th. Whatever the outcome, theEPA retains the right to regulate carbon di-oxide: the justices ensured that by declar-ing it a pollutant in 2007.

This is one area where Mrs Clinton isrunning for a third Obama term. She in-tends to make America a “clean energy su-perpower” by speeding up the process ofgreening that Mr Obama began. Withinfour years she wants half a billion solarpanels installed, and by 2027 she plans fora third of electricity to come from renew-ables. Mrs Clinton laments that poorer ar-eas are often the most polluted—citing, forexample, the filthy water in Flint, Michi-gan. States and cities which build greener

infrastructure, such as more thermally effi-cient buildings, will get handouts worth$60 billion. Mrs Clinton is vague abouthow she would pay for this, but slashingfossil-fuel subsidiescould be partof the an-swer. Such handouts came to nearly $38billion in 2014, according to Oil Change In-ternational, a research outfit, though esti-mates vary wildly.

Green types argue that such ambitiousplans are possible. But since America is al-ready lagging on its climate pledges for2025, according to a study just published inNature Climate Change, such optimism ap-pears misplaced—especially as Mrs Clin-ton hasno planseither to price or to taxcar-bon. In this she has learned from MrObama’s failures. His attempt to pass acap-and-trade bill floundered in 2010, andhe has tried to avoid Congress on environ-mental issues ever since. The Clean Air Actof 1963, for example, supposedly under-pins the Clean PowerPlan, allowinghim tododge the Senate. MrObama has also usedhis executive authority to ratify the Parisclimate deal and to create the world’s larg-est protected marine area offHawaii.

Mrs Clinton may follow suit with envi-ronmental executive actions of her own,according to hints from her campaignchief, John Podesta, Mr Obama’s environ-mental mastermind. She may seek to regu-late methane leaking from existing gas in-stallations and to tighten fuel-efficiencystandards.

But what one president enacts, the nextcan challenge. Mr Obama’s penchant forexecutive action leaves the door open forMr Trump to stall and perhaps reverse en-vironmental policies if he becomes presi-dent. His intention to rip up the ParisAgreementwill prove hard to carryout in asingle term, however: it comes into forcebefore January, and untangling Americafrom its provisions could take around fouryears. Mr Trump favours oil and gas pro-duction on federal lands and opening off-shore areas to drilling. He also plans “a top-down review of all anti-coal regulations”.Such moves could imperil the Paris dealanyway. If the world’s second-largest pol-luter shirked its pledges to cut emissions,many other countries would wriggle outof theirs.

Either candidate, as president, wouldbe at the mercyofthe markets. Aglut offos-sil fuels means that coal production has de-clined by almost a quarter since the highsof 2008. Improvements in fracking tech-nology may see American shale outputstabilise, and perhaps even grow, if it al-lows firms to compete more efficientlywith rivals in Saudi Arabia. But the cost ofsolar and wind power, and of the storageneeded to smooth out theirvariations, willkeep dropping. IfMrTrump becomespresi-dent, energy firms may reduce emissionsanyway. IfMrsClinton does, theymay giveher green policies a needed boost.7

Notes from the undergrowth

HillaryClinton’s environmental plans are pragmatic. Donald Trump’s arenon-existent

Bring me sunshine

Source: Solar Energy Industries Association

United States, solar photovoltaic units installed

CapacityAnnual, megawatts, ’000

Price per watt$

2

0

4

6

8

2009 11 13 15

2

0

4

6

8

2009 11 13 15

In Flint, don’t drink the water


6 US election briefs Climate change The Economist


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TO BELIEVE some youngvot-ers—especially those whoshowed up at Bernie Sandersrallies earlier this year—America is in the midst of a

student debt crisis. In 2010 student loansovertookcredit cards to become the biggestsource of American household debt otherthan mortgages. Today, they total about 7%ofGDP. Ofthose who have borrowed fromthe federal government and began repay-ments in 2011, 10% defaulted within twoyears, up from 4.5% in 2003. The problemanimates the left: whereas Donald Trumphas talked about the subject only fleetingly,Hillary Clinton has detailed policies forhelping penniless scholars. Who could op-pose such a worthy aim?

Defaults on student debt are highestamong so-called “non-traditional” stu-dents. They attend community colleges,which provide short, typically two-yearcourses, or profitmaking universities,which offer heavily marketed and priceydegrees which are sometimes of dubiousmerit. According to number-crunching byAdam Looney of the Treasury Departmentand Constantine Yannelis of New YorkUniversity, non-traditional students madeup more than half of all new borrowersfrom the federal government between2004 and 2014. They accounted for fully70% of those who defaulted within twoyears ofstarting repayments in 2011.

The problem non-traditional studentsface on graduation is more often low in-comes than high debts. In 2014 the mediangraduating borrower from a communitycollege owed $11,700, compared with$26,500 among those who had attended aselective, four-year course. Yet while 25- to34-year-olds with bachelor’s degrees ormore earned an average of$59,000 in 2015,those with two-year degrees made only$38,500. Just as those with large mortgagestypically have big houses, those with hugestudent debts usually have a graduate de-gree in, say, business or medicine, and canexpect a bumper salary as a result. The av-erage aspiring medic borrows $138,000 forher graduate education; lawyers-to-be,$107,000. Yet the three-year default rateamong graduate students is only 3%.

At first, during the primaries, Mrs Clin-ton promised to make community collegefree. She also said she would make publiccolleges “debt-free”—ie, cheap—for low-and middle-income students who study intheir home states. This makes some sense.

But a need to appeal to Mr Sanders’s fansled her to expand herplan in July. Mrs Clin-ton now pledges that by 2021no Americanfrom a household earning less than$125,000 will need to pay any tuition feesat all to instate public universities.

Mrs Clinton’s refreshed plan will costanywhere between $350 billion and $800billion over a decade, according to theCommittee for a Responsible Federal Bud-get, a think-tank. Much of that cash willflow to students who will go on to be afflu-ent. The returns to college education haveneverbeen higher (a factwhich helps to ex-plain Mr Trump’s success with voters whohave spent less time studying). Over a ca-reer college graduates can expect to earntwice what high-school graduates make,according to one estimate.

Reforms during Barack Obama’s presi-dency have already made student debtmuch more manageable. Congress and theObama administration have expanded in-come-linked repayment programmes forthose with federal loans. Today, any stu-dent who faces repayments exceeding 10%of her income can cap her repayments atthat fraction ofherearnings. After20 years,the government will write off any remain-ing balance. This makes student debt re-semble a tax more than conventional bor-rowing. In 2015 the education departmentstarted offering a similar deal to those withloans predating 2007. One-in-five borrow-ers, together owing fully 37% of all student

debt, are now enrolled in income-linkedrepayment.

There are problems with theseschemes, notes Susan Dynarski of the Uni-versity of Michigan. Students must opt into them, which requires knowing that theyexist, and must then renew their paper-work every year. Perhaps as a result, fewerthan half those eligible have enrolled. Andthe income used to calculate repayments isbased on the preceding year. So someonewhose income tanks can still struggle toservice his debts. To her credit, Mrs Clintonwants to improve income-linked repay-ment, in part by making enrolment auto-matic. (Another attractive idea is to collectstudent-loan repayments through employ-er payrolls, as happens in Britain).

If such reforms happen, means-testedfree tuition would offer few extra benefits.Such a policy would also redistribute arbi-trarily. A student from a poor family whobecomes rich will have no debts, whereasstudents from families earning above the$125,000 cut-off may still need to borrowand hence repay 10% of their income foryears, even if they end up poor. The with-drawal of tuition subsidies as income risescould sharply increase implicit marginaltax rates. And subsidising only instate tu-ition creates a pointless incentive for stu-dents to avoid venturing further afield.

An existing programme illustrates thedangers of careless subsidies. Since 2012those enrolled in income-based repay-ment who also work for the government,or a not-for-profit organisation, can havetheir debts written-off after only a decade.This includes borrowing for pricey and lu-crative graduate degrees. So far, 432,000borrowers have signed up to the scheme,nearly 30% of whom have loan balancesexceeding $100,000, according to JasonDelisle of the American Enterprise Insti-tute, a think-tank. This gives a windfall tothose who aim to workfor the governmentanyway, and who expect to spend at leastten years repaying their undergraduatedebts that greatly exceeds the maximumsupport the government provides to low-income undergraduates.

The Obama administration now wantsto rein in this programme. Worryingly, MrsClinton makes no mention of curtailingthe largesse. Instead, she calls for still moreways for students to be able to dischargedebts via public service.

Padding the pockets of well-off gradu-ates should be a low priority for the federalgovernment. Mrs Clinton should concen-trate on fundingcommunitycolleges, regu-lating for-profit universities and improvingincome-linked repayment. But whatevershe does, it is not hard for her ideas to beatMr Trump’s, which amount to doing“something with extensions, and lower in-terest-rates, and a lot ofgood things”. Here,as on so many other issues, Mrs Clintonwins by default.7

More present than correct

WASHINGTON, DC

HillaryClinton’s college-funding plan is betterpolitics than policy

Many happy repayments


7US election briefs Student loans The Economist


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IN SEPTEMBER the authori-ties in St Petersburg, on thewest coast of Florida, re-leased about 150m gallons ofraw and partially treated

sewage into Tampa Bay, the natural har-bour on which the city sits. Flooding relat-ed to Hurricane Hermine had over-whelmed the city’s ageing wastewatersystem—the third such incident in 13months. According to a whistle-blower,consultants warned the city in 2014 thatclosing one of its sewage plants could leadto such a catastrophe. But it did it anyway.

Both candidates forpresident agree thatAmerica must spend more on its infra-structure which, though good, is deterio-rating. It attracts a score of 5.9, on a scale of1-7, from the World EconomicForum, downfrom 6.1 in 2007. (Over the same period,other rich countries saw their scores growby an average of 0.3.) Government datashow that in 2014 some 32% of America’sroads were rated “poor” or worse forbumpiness, up from 16% in 2005. The aver-age annual delay faced by commuters hasincreased by 62% since 1990.

The decline is the inevitable result offalling infrastructure investment (seechart). It tumbled after the recession asstates and local governments, who pro-vide nearly two-thirds of the money,scrambled to balance their budgets. Thefederal government’s recession-fightingstimuluspackage mitigated thisonlyslight-ly. Between 2009 and 2014 just $55 billionof $828 billion in stimulus spendingflowed to water and transport projects.From 2013 fiscal austerity made infrastruc-ture funds still scarcer. In 2015 Congressscrimped togetherenough cash to keep thehighway trust fund, which provides mostof the federal funding for transport, in theblack until 2020. But more money is need-ed to stop the decay.

Hillary Clinton promises an extra $275billion over five years, which should re-turn infrastructure investment to close toits pre-recession level. Her shopping list islengthy. It includes both sober promises,like fixing potholes, and fanciful ideas,such as creating a “world-leading” railwaynetwork (taken at its word, this would re-quire sending Japanese style bullet-trainsacross the country). This first $275 billionwould come from mostly unspecifiedchanges to the corporate tax.

Mrs Clinton would also continue Ba-rack Obama’s quest to establish a national

infrastructure bank, capitalised with $25billion from the Treasury. The bank wouldborrow a further $225 billion, either frominvestors, or from Uncle Sam (which mightbe cheaper). In any case, the bank wouldfunnel its cash to infrastructure projects inthe form of loans and loan guarantees (itwould support only projects which canmake a return, like toll bridges).

Donald Trump—as usual—has less ofsubstance to say. He laments the state ofthe nation’s bridges and airports andpromises to repair them. He also says hewill deliver“gleamingnewinfrastructure”.Asked in August how much this wouldcost, he replied, ostentatiously, that hewould “at least double” Mrs Clinton’s

numbers. To achieve this, he would start “afund” and—wait for it—make a “phenome-nal” deal with investors to raise capital.

Loose talk about loose purse-stringswill make sceptics shiver. In the past, feder-al funds have flowed easily to boondog-gles because politics, rather than thought-ful analysis, has directed the flow ofmoney. Forexample, stimulus spending ontransport was twice as generous, on a per-person basis, to sparsely populated areasthan to densely populated ones, accordingto Edward GlaeserofHarvard University. Itcosts more to build in crowded cities thanon empty fields, but low-density areas are,he notes, “remarkably well-endowed withsenators per capita”.

Useless projects excel at soaking up fed-eral cash. Alaska recently abandoned aplan to build an infamous bridge connect-ing an island with just 50 residents to themainland. But it did use federal cash tobuild a road leading up to where the“bridge to nowhere” would have stood.

West Virginia has almost the opposite pro-blem. It has been building a highwaythrough the Appalachian mountains forover a decade. But the absence of a con-necting road in neighbouring Virginiameans the project lacks a clear purpose.

Any new infrastructure programmemust seek to avoid such profligacy. The pri-ority should be unglamorous mainte-nance work, which has been neglectedeven as wasteful new projects have goneahead. The Federal Highway Administra-tion says that from 2011 until 2030 annualinvestment in roads must average $73 bil-lion-78 billion, in 2010 dollars, just to re-store existing roads to good condition (forcomparison, such “rehabilitation” spend-ing totalled only $60 billion in 2010). Main-tenance could consume a big chunkofMrsClinton’s promised direct spending.

An infrastructure bank could screennew projects for value-for-money. MrsClinton promises hers would be indepen-dent of government and would choosewhat to fund “based on merit, notpolitics”.The requirement that projects produce rev-enue to repay the bank would introducemarket discipline to the process, especiallyif private money were involved (thoughsome wonder just how many profitable in-frastructure opportunities exist).

Regulation might slow the diggers. Aplethora of environmental, historical andother rules often restrict building. Manystimulus projects, far from being “shovel-ready”, took more than a year to get goingbecause of local red tape. In May LarrySummers, a former treasury secretary anda vocal cheerleader for more infrastructureinvestment, complained in an article in theBoston Globe that regulation had delayed aproject to repair a bridge near his office atHarvard University. The bridge tookonly 11months to build in 1912, but the refurbish-ment, which began in 2012, is yet to becompleted. When a contractor discoveredit had to move a water pipe, the associatedpaperworkdelayed workby a year. Anoth-er hold-up was a requirement, imposed bythe Massachusetts Historical Commission,that the bridge had to have special bricks.

Other barmy rules abound. The Davis-Bacon Act of 1931 requires workers on fed-eral projects to be paid the “prevailingwage”—calculated by bureaucrats—in thelocal area. Law prevents the federal gov-ernment from charging tolls on existing in-terstate highways, limiting a potentialsource of new funds (Mr Obama has tried,unsuccessfully, to change this).

In recent years it has often taken disas-ter to spur investment. St Petersburg, Flori-da is now rushing to repair its leaky pipes;New Jersey at last raised its petrol tax tofund new transport spending after a fataltrain crash in September. It is good thatboth candidates recognise the need for im-provement. But thatwill require more thansimply opening the chequebook. 7

A view from the bridge

WASHINGTON, DC

It will take more than just moneyto get America moving

No stimulus here

Source: Bureau of Economic Analysis

United States, net public investment, $bn(2009 dollars annualised)

2000 02 04 06 08 10 12 14 160

50

100

150

200

Non-defencestructures

Non-defenceintellectualproperty


8 US election briefs Infrastructure The Economist


Main head

date line


FOR a president, makingeducation policy can be likerunning a school with thou-sands of unruly pupils. Hecan goad states and coax

school districts, offering gold stars to thosewho shape up. But if a class is defiant hecan do little. Just 12.7% of the $600bn spenton public education annually is spent bythe federal government. The rest is split al-most equally between states and the13,500 school districts. Many presidentsend up like forlorn head teachers. Americaspends more per child than any big richcountry but its pupils perform below theirpeers on international tests.

Despite the constraints, George W. Bushand Barack Obama both used the regula-tory power of the federal government tospur reform. Through the No Child Left Be-hind (NCLB) Act of 2001, the Republicanpresident launched a flurry of standar-dised tests, sanctioning schools whose pu-pils failed to progress. Through his “Race tothe Top” initiative, announced in 2009, theDemocratic one offered cash to states in ex-change for reforms such as higher stan-dards and evaluating teachers based onpupils’ results. Similarpolicies were imple-mented by 43 states in exchange for federalwaivers from the testing mandates ofNCLB. Mr Obama has also championedcharter schools, the part-publicly fundedand independently run schools hated byteachers’ unions.

But the era of regulation-driven schoolreform is now coming to an end, for tworeasons. The Every Student Succeeds Act(ESSA), passed in December as a replace-ment for NCLB, hands back power to statesover standards and tests, making it hard fora future president to seek to micromanageschool reform. And in any case, neitherDonald Trump nor Hillary Clinton are in-clined to imitate the past two presidents.Mr Trump is “totally against” and “maycut” the Department of Education. Declar-ing that “it is time to have school choice”, inSeptember he pledged to give states $20bnto fund school vouchers for parents ofpoor children.

Mrs Clinton has also been keen to deferto states. This is partly because she knowsESSA shrinks her room for manoeuvre. Butshe has also made a political calculation.Unlike Mr Obama, she is backed by teach-ers’ unions. They oppose tying teacherevaluations to pupils’ results and want tokeep the caps on charter schools in place in

the 23 outof43 states thatpermit them. MrsClinton has been studiously ambiguouson such limits, to the regret of reformistDemocrats, who note that in most citiescharter schools outperform ordinary pub-lic schools. Though she has sent Tim Kaine,her vice-presidential nominee, to mollifyfunders of charters, they are braced for achange of tone. Charters will still expand,but they will receive less federal support.“We reformers have had a big tailwind un-der Obama, which we’re unlikely to haveunderClinton”, saysWhitneyTilson, an in-vestor and education philanthropist.

The Democratic candidate’s wish toneutralise the toxic politics of school re-form has another, less cynical cause. Shewants to focus on what comes before andafter school, the “bookends” of pre-schooland higher education. America “has fallen

off the pace when it comes to early child-hood education”, says Steve Barnett of theNational Institute for Early Education Re-search, at Rutgers University. About half ofall three- to four-year-olds are enrolled inpre-school, less than in many poor coun-tries (see page 63) and one of the lowestshares in the OECD. And yet the country isthird-highest in the club of mostly richcountries for the share ofnet income spenton child care. In 31 states a place at a child-care centre is more expensive than at apublic university. America is the onlycountry in the OECD without universallyguaranteed maternity leave.

Both Mr Trump and Mrs Clinton havepledged to do something about all this.Asked last year about federal funding forpre-school, the Republican said, “well, Idon’t like it”. But in September, prodded byhis daughter, Ivanka, Mr Trump said hewanted to allow the costs of child care to

be deducted from income taxes and to in-troduce six weeks ofpaid maternity leave.

Mrs Clinton can point to a longer com-mitment to early childhood development.Asfirst ladyofArkansas in the 1980sshe setup one of the country’s first schemes tohelp poor parents educate their toddlers athome. Today she says she will introduce 12weeks of guaranteed paid family leave,and ensure that child care costs no morethan 10% ofa family’s income, in part by of-fering a tax credit. She also wants to usefederal funds to provide pre-school for allparents who want it for their children.

As most children know, nice things costmoney. Mrs Clinton has not given a de-tailed plan for how to pay for her earlychildhood policies. Much will depend onwhetherDemocrats take Congress. But thisis increasingly a bipartisan cause. Of the 42states that provide funding for pre-schooleducation, most have Republican gover-nors. Georgia, Oklahoma and Florida haveled the way in offering near-universal cov-erage (see map).

The results at the state level, however,suggest realism is required. According to astudy led by Dale Farran ofVanderbilt Uni-versity, Tennessee children who attendedthat state’s scheme performed no better(and in some cases worse) in school teststhan similar children who did not attend.Ms Farran argues that some “states are sobusy ramping up pre-K that they are notpaying attention to what is actually goingon in classrooms”. She argues that graftinga year of pre-school onto poorly perform-ing public school systems will not helpchildren, especially those whose parentsactively help them learn outside ofclass.

Better results can be found in cities suchas Tulsa and Boston. Then there is NewYork, which Mrs Clinton has cited as amodel. Since 2014 it has expanded thenumber of free all-day pre-school slots forfour-year-olds from 19,000 to 71,000, oneof the fastest roll-outs anywhere in theworld. Richard Buery, the deputy mayor incharge of the scheme, argues that its suc-cess requires well-trained staff, a rigorouscurriculum—and money. The averagewage of a child-care worker in America isless than that of a dog-walker. In New Yorkthe cost per child for a year of pre-school is$12,000, more than twice as much as inTennessee. “Doing it on the cheap will getyouuniversal child care butnothigh-quali-ty pre-K’, says Mr Buery.

What of the other bookend? Mrs Clin-ton wants to make tuition at public univer-sities free for many more students. She isalso mulling whether to offer financial re-wards to universities that increase the en-trance and graduation rates of poorer stu-dents. She may appoint a universitypresident as education secretary. Even asan era of activist schools policy ends, thefederal government still has bold plans toimprove education. 7

Little changes

NEW YORK

George W. Bush and BarackObama made school reform a priority. The nextpresident will lookelsewhere

ME

VT NH

WA ID MT ND IL MI NY MA

OR NV WY SD IA

MN

OH PA CT

CA UT CO MO KY WV MD DE

NM KS TN NC SC DC

AL GA

FL

AK

IN

NE VA

OK

TX

AR

NJ

WI

AZ

LA

ME

VT NH

WA ID MT ND IL MI NY MA

OR NV WY SD IA

MN

OH PA CT RI

CA UT CO MO KY WV MD DE

NM KS TN NC SC DC

AL GA

HI FL

AK

IN

NE VA

OK

TX

AR

NJ

WI

AZ

LA MS

Source: National Institute for Early Education Research *4-year-olds

US averageNo programme

Children enrolled in state pre-kindergarten*, 2014-15, %

<20 40-6020-40 >8060-80

29


9US election briefs Education The Economist

10 Briefing Title to come The Economist April 25th 2012US election briefs Foreign policy The Economist

TO EXPLAIN what foreignpolicy would be like underHillary Clinton, allies start bydescribing her feelings aboutAmerica. It matters that the

former secretary of state grew up in theMidwest and was a young “Goldwatergirl”, backing the sternly anti-communistBarry Goldwater, during his failed presi-dential run in 1964. Mrs Clinton “seesAmerica as a force for good”, and as FirstLady was marked by seeing her husbanduse military power to bring peace to theBalkans, says a former senior official. Hedraws a contrast with Barack Obama, aman instinctively wary when the clamourmounts for American intervention.

Another formerofficial calls MrObamaunusually focused on “global” threats,such as climate change, pandemics, nuc-lear non-proliferation and far-flung terrornetworks. To secure Chinese co-operationon climate change, or Russian help in curb-ing Iran’s nuclear programme, Mr Obamahas been willing to downplay “geopoliti-cal” threats, such as Chinese land grabs inthe South China Sea or Russian incursionsin Eastern Europe. Mrs Clinton, predictsthat ex-official, “is likely to tilt the balanceback” towards “traditional” geopolitics.

Yet other insiders caution against as-suming that Mrs Clinton would be muchmore hawkish in her actions than MrObama—not least because some intracta-ble problems will dominate her in-tray.Start with Syria. In the presidential debatesshe talked of pushing for a no-fly zone andsafe havens in Syria. But in a speech tobankers in 2013, recently leaked, she notedthat a no-fly zone would require riskystrikes on Syrian air defences, some inheavily populated areas. Insiders predictshe will begin with a reviewofhowthe As-sad regime’s resilience, Russian interven-tion and opposition weakness have limit-ed her options since she was last in office.

Veterans of the Obama administrationexpect Mrs Clinton to reach out to Israel,Egypt, Saudi Arabia and Turkey—long-timepartners whose relations with Mr Obamaare dire. But they predict limits to suchbridge-building. An ex-official notes thatMrs Clinton calls Middle East peace “a pri-ority” (without clarifying how much ofone), but for Israel’s prime minister, Binya-min Netanyahu, peace with Palestinians is“no priority at all”. Another colleague sug-gests that Mrs Clinton will keep MrObama’s nuclear-arms deal with Iran, but

will be more willing publicly to countersuch Iranian provocations as weaponstransfers to terror groups or harassment ofAmerican ships. During the campaign shetalked of an “intelligence surge” against Is-lamic State (IS). That empty phrase dis-tracts from her likely approach, involvingmore continuity than change.

In Asia, North Korea’s recent aggressiveactions involving nuclear tests and missiletrials will head Mrs Clinton’s agenda. Al-lies say she has signalled support fortougher sanctions, perhaps on North Kore-an workers overseas and on North Koreanaccess to banks, and for anti-missile de-fence co-operation with Japan and SouthKorea—all steps that alarm China. Chineseofficials have further reasons for anxiety.They recall Mrs Clinton’s defence of wom-en’s and human rights at a conference inBeijing in 1995, and have not quite trustedher since. Chinese leaders quietly cheeredwhen the present campaign saw Mrs Clin-ton forced to disavow the Trans-PacificPartnership (TPP), a trade pact that wouldbind America more closely with 11Asia-Pa-cific nations, not including China.

If elected, her relations with Russia’sautocratic leader, Vladimir Putin, wouldbegin in a glacial state. Mr Putin did nothide his anger when, in 2011, the then-sec-retary of state questioned the fairness ofRussian parliamentary elections. In 2016the Clinton campaign, backed by Ameri-can spy chiefs, accused Russia of trying to

meddle in the presidential election bystealing e-mails from leading Democrats.

In contrast, when Trump advisers ex-plain their candidate’s worldview, theystart with how their boss feels about him-self, his gut instincts and abilities as a nego-tiator—with peskypolicydetails to be filledin later. They describe a “realpolitikkind ofguy” who sees a dangerous, ungratefulworld, which for too long America hasbeen asked to fix on its own. Keith Kellogg,a retired lieutenant-general and adviser toMr Trump, compares his boss to RonaldReagan forhis willingness to treat Russia asa competitor with whom deals can bemade, notably when making commoncause against Islamists in Syria.

Critics call Mr Trump a man of thor-oughly un-Reaganesque views. After all hehas praised Mr Putin for his “very strongcontrol over his country”, and suggestedthat America’s duty to defend NATO alliesmight be conditional. Asked by the NewYork Times ifhe would defend the Baltic re-publics from Russia, he replied: “If they ful-fil their obligations to us, the answer isyes,” grumbling about NATO memberswho missed targets for defence spending.

Interviewed by The Economist in 2015,Mr Trump called China’s construction ofairstrips on reefs in the South China Sea ahostile act, adding: “However, it is very faraway. And they’re alreadybuilt.” He breezi-ly predicted that Japan might offer a sol-ution: “If we step back they will protectthemselves very well Japan…used to beatChina routinely in wars.”

Mr Trump says he will renegotiate thenuclear-arms deal with Iran, and pressureChina into neutralising the North Koreathreat. He has called climate change a hoaxand promised to cancel billions of dollarsin payments to United Nations climate-change programmes. He says he would“bomb the shit” out of IS, without explain-ing how this would be done.

Mr Trump is at his most detailed whenoutlining his suspicion of free trade. In hisfirst days in office he pledges to renegotiatethe NAFTA trade pact with Canada andMexico and put the TPP on hold. He wouldhave China declared a currency manipula-tor, saying the yuan is undervalued—acharge most economists think out of date.Asked about the risks of a trade war, MrTrump’s trade adviser, Dan DiMicco, sayshis candidate thinks that America hasbeen in a trade war with China for 20years. Mr DiMicco, a former CEO of Nucor,a bigsteelmaker, says: “The era oftrade def-icits is over,” predicting that the threat of ta-riffs can be used to achieve balanced trade.

Mr Trump knows what his voters wantto hear: that America holds a winninghand, if it is ruthless enough to play it.Many of his promises are nonsense. Butgiven the chaoshe could unleash, voter an-ger in America will be the least of theworld’s worries. 7

World-shaking

WASHINGTON, DC

HillaryClinton’s foreign policywould be similar to BarackObama’s. DonaldTrump’s would be like nothing America has seen before

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