Around the world, cap-and-trade is still alive and kicking

Posted by Brad Plumer at 03:32 PM ET, 06/05/2012


When the climate bill died in the U.S. Senate in 2010, most observers assumed that was the last dying gasp for “cap-and-trade” as a policy for tackling global warming. Here in the United States, it’s hard to find an environmentalist or Democrat who will even whisper the phrase anymore.


Australia’s getting in on the act. (TIM WIMBORNE - REUTERS)

 Yet cap-and-trade is very far from dead. Across the globe, dozens of countries are either enacting or studying cap-and-trade programs for their heat-trapping greenhouse gases, according to the World Bank’s 2012 Carbon Market Report. Some countries, like South Korea and New Zealand, have just recently passed full programs, in which they set a hard overall ceiling on their carbon emissions, and companies get pollution permits to trade among themselves. Other nations — from China to Costa Rica to Indonesia — are seriously considering the idea.

“A range of countries seem to have decided that this is the policy of choice for meeting their emissions goals,” says Jennifer Morgan of the World Resources Institute. Here’s a rough grouping of the countries detailed in the World Bank report:

Countries or regions that have already passed cap-and-trade: This includes the European Union, Australia, New Zealand, South Korea, California, and Quebec. They’ve all set hard limits on a significant portion of their carbon emissions. (Different countries have different targets and exemptions for various sectors.) This is a sizeable chunk of the planet: By my calculations, these countries and regions represented roughly 19 percent of the world’s carbon emissions in 2008.

Countries that could shift to cap-and-trade this decade. Mexico and Brazil have both recently passed laws to significantly slow their rate of emissions growth by 2020. (Brazil’s target is voluntary.) They’ve both set up task forces to study various ways to achieve this, with cap-and-trade as an option. Japan, for its part, has set up a limited cap-and-trade scheme for Tokyo and has a voluntary carbon-trading scheme at the national level that has slightly curbed emissions.

Meanwhile, China is setting up its own regional cap-and-trade systems in several of its provinces and is looking to set up a national program by the end of the decade. Jennifer Morgan says that her organization, WRI, recently hosted a Chinese delegation in the United States to study California’s climate program, as well as the small cap-and-trade system for electric utilities in the Northeast. While China’s program likely wouldn’t shrink the country’s overall level of emissions, it would at least slow the country’s ferocious growth in greenhouse gases.

Countries that are still pondering the idea. According to the World Bank report, there are at least 14 developing countries that are in various stages of study. Chile, Costa Rica, Indonesia, Thailand, and Jordan are all developing some sort of “crediting mechanism.” South Africa has a carbon tax that could well be converted to a cap-and-trade program.
Add these programs all up, and it’s potentially quite significant. Right now, about 6 percent of the world’s greenhouse-gas sources are capped and traded. By the end of the decade, according to some estimates, that could rise to as much as one-third of all emissions.

Many of these countries could eventually link together — Australia’s climate-change minister, Greg Combet, has suggested that eventually South Korea, Australia, New Zealand and China could cooperate on some sort of pan-Asian carbon-trading system. And, the World Bank notes, there’s still plenty of demand for carbon-offset projects in the developing world under the U.N. program. All told, the global carbon-trading market rose to a record $176 billion in 2011.

To be sure, there are still plenty of concerns about carbon trading. For one, carbon prices in Europe have collapsed with the recession down to $8 per ton, which gives companies little incentive to invest in clean-energy projects. (Of course, one argument is that this is how cap-and-trade should work — when there’s a recession and pollution is way down, then companies should get a reprieve from cutting.) Critics have also questioned whether the United Nation’s carbon offsets really work, or whether they’re just funding projects, like reforestation, that might have happened anyway.

That said, cap-and-trade is still garnering plenty of interest in most of the world — even if the idea’s verboten here in the United States.

Stiglitz: The Price of Inequality

Tuesday, June 05, 2012

Joe Stiglitz:

The Price of Inequality, by Joseph Stiglitz, Commentary, Project Syndicate: ...There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country... This is one of the reasons that America has the highest level of inequality...
It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.
A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from ... either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).
Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. ...
It might not be so bad if there were even a grain of truth to trickle-down economics – the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off ... than they were ...a decade and a half ago. ...
Rent-seeking distorts the economy. ... Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset – its people – is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential...
But, most importantly, America's inequality is undermining its values and identity. With inequality reaching such extremes, it is not surprising that its effects are manifest in every public decision, from the conduct of monetary policy to budgetary allocations. ...
America can no longer regard itself as the land of opportunity that it once was. But it does not have to be this way: it is not too late for the American dream to be restored.

Posted by Mark Thoma on Tuesday, June 5, 2012 at 11:29 AM

The Price of Inequality

Joseph E. Stiglitz

Jun. 5, 2012 NEW YORK – America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?

Illustration by John Overmyer

Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data.

This is one of the reasons that America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. In the “recovery” of 2009-2010, the top 1% of US income earners captured 93% of the income growth. Other inequality indicators – like wealth, health, and life expectancy – are as bad or even worse. The clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom.

It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses.

A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights).

Likewise, part of the wealth of those in finance comes from exploiting the poor, through predatory lending and abusive credit-card practices. Those at the top, in such cases, are enriched at the direct expense of those at the bottom.

It might not be so bad if there were even a grain of truth to trickle-down economics – the quaint notion that everyone benefits from enriching those at the top. But most Americans today are worse off – with lower real (inflation-adjusted) incomes – than they were in 1997, a decade and a half ago. All of the benefits of growth have gone to the top.

Defenders of America’s inequality argue that the poor and those in the middle shouldn’t complain. While they may be getting a smaller share of the pie than they did in the past, the pie is growing so much, thanks to the contributions of the rich and superrich, that the size of their slice is actually larger. The evidence, again, flatly contradicts this. Indeed, America grew far faster in the decades after World War II, when it was growing together, than it has since 1980, when it began growing apart.

This shouldn’t come as a surprise, once one understands the sources of inequality. Rent-seeking distorts the economy. Market forces, of course, play a role, too, but markets are shaped by politics; and, in America, with its quasi-corrupt system of campaign finance and its revolving doors between government and industry, politics is shaped by money.

For example, a bankruptcy law that privileges derivatives over all else, but does not allow the discharge of student debt, no matter how inadequate the education provided, enriches bankers and impoverishes many at the bottom. In a country where money trumps democracy, such legislation has become predictably frequent.

But growing inequality is not inevitable. There are market economies that are doing better, both in terms of both GDP growth and rising living standards for most citizens. Some are even reducing inequalities.

America is paying a high price for continuing in the opposite direction. Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset – its people – is not being fully used. Many at the bottom, or even in the middle, are not living up to their potential, because the rich, needing few public services and worried that a strong government might redistribute income, use their political influence to cut taxes and curtail government spending. This leads to underinvestment in infrastructure, education, and technology, impeding the engines of growth.

The Great Recession has exacerbated inequality, with cutbacks in basic social expenditures and with high unemployment putting downward pressure on wages. Moreover, the United Nations Commission of Experts on Reforms of the International Monetary and Financial System, investigating the causes of the Great Recession, and the International Monetary Fund have both warned that inequality leads to economic instability. 

But, most importantly, America’s inequality is undermining its values and identity. With inequality reaching such extremes, it is not surprising that its effects are manifest in every public decision, from the conduct of monetary policy to budgetary allocations. America has become a country not “with justice for all,” but rather with favoritism for the rich and justice for those who can afford it – so evident in the foreclosure crisis, in which the big banks believed that they were too big not only to fail, but also to be held accountable.

America can no longer regard itself as the land of opportunity that it once was. But it does not have to be this way: it is not too late for the American dream to be restored.

House Legislation Would Cause 350,000 People to Forgo Health Coverage and Could Jeopardize Health Reform

PDF of this report (5pp.)

By Judith Solomon and Robert Greenstein

June 5, 2012

Related

• Limitation on Use of Tax-Advantaged Health Accounts Should Not Be Repealed
• Excise Tax on Medical Devices Should Not Be Repealed

The House is set to consider legislation this week that would make a change in the subsidies that health reform (the Affordable Care Act) provides to help low- and moderate-income people buy health insurance, causing 350,000 of them to forgo coverage and making it harder for health reform’s insurance exchanges to work effectively.

The proposed change in the subsidies is designed to offset the cost of (1) a proposed repeal of health reform’s excise tax on medical devices (as demanded by the medical device industry, which has waged a misleading campaign against it), and (2) proposed changes in flexible spending accounts (FSAs) and health savings accounts (HSAs) that do not represent either sound health policy or sound tax policy and would disproportionately favor higher-income people. [1] 

The change in the subsidies to purchase insurance would substantially increase the repayment charges that the Internal Revenue Service would impose at tax time on many low- and moderate-income people who received subsidies to help them afford coverage during months of the year when their incomes were low, but whose incomes rose later in the year when they found a job or received a promotion or for another reason.

Consider a married couple with one child whose household income is 145 percent of the poverty line ($27,680 in today’s dollars) from one spouse’s earnings.  The sponsor’s job doesn’t provide health coverage, and the family receives a subsidy to buy coverage in the exchange.  At the start of September, the other spouse gets a job that does provide coverage and that raises the household’s income for the year to 260 percent of poverty ($49,634 in today’s dollars).  The family enrolls in this employer’s health plan and ceases to receive subsidies.  Under the House provision, the family would owe about $2,100 to the IRS at tax time.  The prospect of having to pay very large sums back to the IRS would likely deter many people from using the subsidies in the first place, causing them to remain uninsured.

Indeed, for many families in such a situation, the amounts they would have to repay to the IRS if they received subsidies would be more than five times higher than the penalty they would owe if they remained uninsured in 2014.  In the example above, the penalty would be about $330 if the family had forgone coverage for the first eight months of the year, as compared to the $2,100 or so they would owe to the IRS.  That’s why the Joint Committee on Taxation estimates the House provision would cause 350,000 people who would otherwise purchase coverage to forgo it instead.

Those who forego coverage would disproportionately be people who are healthier than average.  As a result, the pool of people seeking coverage through the health insurance exchanges would be a somewhat sicker pool, which would push up premiums for insurance purchased through the exchanges and thereby weaken the exchanges’ ability to function effectively.  (This may be an unstated goal of the provision; some of health reform’s Congressional opponents have said that if they cannot repeal the law outright, they will seek to pull out “threads” to try to unravel it.)

Congress already has acted twice since health reform’s enactment in March 2010 to raise the amounts that households that receive health insurance subsidies can be required to pay to the IRS — thus raising the amount that the family in the example above would pay, from $400 (under the Affordable Care Act (ACA) as originally enacted) to $1,500.  Those changes, which were used to finance two earlier pieces of legislation, have boosted families’ potential repayment amounts by up to six times, which already will cause an estimated several hundred thousand people to forgo coverage.[2]   Now, the legislation that the House is set to consider this week would go substantially further, raising the repayment amounts for many families enough to threaten the viability of health reform.

Congress Has Raised the Repayment Amounts Substantially

Under the ACA, people who are not eligible for Medicaid and lack access to affordable employer-sponsored coverage can receive subsidies to help them purchase private coverage if their income is below 400 percent of the poverty line.  However, people whose income for the year as a whole turns out to make them eligible for a smaller subsidy than they received during the year (or for no subsidy) must pay back some or all of the subsidy they received when they file their income taxes, even if they received the correct subsidy amount based on their income in the months that they actually got the subsidies.  This provision of the ACA differs sharply from how most other means-tested programs work.  Other programs base eligibility on current income; if a household’s income rises during the year, it ceases to receive assistance or receives a reduced benefit, but it is not made to pay back the aid it received during its period of need.

To prevent the requirement to repay subsidies from undermining the ACA’s goal of covering people while they are out of work or otherwise in need and are uninsured, Congress, in crafting the ACA, limited the amount that a family can be required to pay back to $400 ($250 for an individual) unless the family’s income ends up over 400 percent of the poverty line.  In that case, the family would have to pay back the entire amount of any premium subsidies it received.

Over the past year and a half, however, Congress raised the $400 cap sharply to secure offsets for other legislation: in December 2010, to help pay for extending Medicare physician relief for 2011; and in April 2011, to help pay for repeal of an ACA provision designed to curb business tax avoidance.  As a result of these changes, the $400 cap has tripled for many families and increased for others by as much as six times, depending on the family’s income for the year and the timing of that income.  Many families already face requirements to pay back very large amounts.

To offset the cost of repealing the medical device tax and providing bigger tax breaks through FSAs and HSAs, the House would now eliminate the repayment caps altogether, with serious consequences for tens of thousands of families and potentially for health reform itself.

Repayment Amounts Would Often Far Exceed Penalty for Forgoing Coverage

If the caps on repayment are eliminated, the amounts that families would be required to repay in 2014 would, in many cases, be well over five times the penalty they would face in 2014 under the ACA’s individual mandate if they failed to obtain coverage.  (The ratio is even wider when the individual’s upfront share of premium costs is taken into account.)  Health insurance exchanges will have to inform applicants of their potential obligation to repay subsidies if their income increases and may ask applicants to attest that they understand they may have to repay any subsidies they receive.[3]  Those who are unemployed but expect to get a job during the year will have to be told that they will have to repay some or all of their subsidy if their income increases.

As knowledge spread of the large year-end tax repayments that families could face, many people would — quite rationally — decide to remain uninsured.  This is why the Joint Committee on Taxation projects that by 2022, an additional 350,000 people would forgo coverage because of the pending House provision, on top of the several hundred thousand who will forgo coverage as a result of the big increases already made in the required repayment amounts in the legislation enacted in December 2010 and April 2011.  Our analysis indicates that 38 percent of the estimated $43.9 billion in savings credited to this provision comes from the reduction in the number of people who would enroll in coverage in the exchanges.[4]
As noted, because people who decided to forgo coverage would disproportionately be healthy individuals, the pool of people enrolling with the exchanges would be sicker on average, which would push up everyone’s premiums for insurance.  The higher premiums, in turn, would lead additional healthy people to forgo coverage.  The result would be “adverse selection” that could weaken the viability of the exchanges.

Under the ACA as originally enacted, the repayment requirement for the family in our example would have been $400 — not out of line with the $330 penalty the family would face for failing to have coverage in 2014.  The $400 cap took into account the fact that the subsidies such a family received would have appropriately reflected its income and circumstances during the months it received assistance.  But Congress’s subsequent increases in repayment amounts raised the amount this family would owe to $1,500, already a dangerously high amount that is well out of line with the penalty the family would owe if it failed to obtain coverage in 2014.

There would also be problems for people who received Christmas or year-end bonuses, only to find they now had to pay back part of their health insurance subsidy as a consequence.
More broadly, the fact that many families who had “played by the rules” and done nothing wrong — receiving subsidies accurately based on their current incomes, promptly reporting changes in their incomes, and ceasing to receive subsidies (or receiving smaller subsidies) when their incomes increased — would nonetheless face large repayments would likely trigger widespread backlash against the ACA by many lower-middle and middle-income families.  These people would have been required to buy coverage, only to find that they had to pay up to several thousand dollars in increased taxes to the IRS at the end of the year.  The ensuing backlash could make repeal of the law more likely.

Those pushing to eliminate limits on repayment amounts have claimed that many households will receive subsides much larger than they are entitled to because the health insurance exchanges will base households’ subsidy amounts on outdated income information from the households’ prior-year’s tax returns.  Such charges may have appeared to have merit after the ACA was enacted but no longer do.  The ACA requires the Secretary of Health and Human Services to develop procedures to take changes in household circumstances into account when determining eligibility for, and the amount of, the subsidies that a household will receive, but contains no specifics on how to do so, leaving that to the Secretary.  How this would work wasn’t initially clear.  But HHS issued its final rule on the eligibility determination on March 27, 2012, and the rule requires applicants for subsidies to validate and update the information on their prior tax return; if their income has increased in the interim, the updated information must be used to determine their subsidy amount.  This rule also requires people who receive subsidies to report changes in income or other circumstances within 30 days.  The preamble explains that “it is important for the Exchange to accept and identify changes to help ensure that an enrollee’s eligibility reflects his or her true circumstances.”[5] 

Separate provisions of the ACA provide for a full set of enforcement actions, including substantial fines, to be taken against households that receive excess subsidies due to misrepresentation or fraud.

Some have questioned whether it is equitable to allow two households that end up with the same annual income to receive different amounts of premium tax credits over the year.  Our example shows, however, that while such families might have the same annual income, their circumstances and ability to afford health insurance are very different over the course of the year.  Families without a job for part of the year cannot pay the same amount for coverage in those months as a family with income that is steady throughout the year. The family in our example could not have paid for coverage during the first part of the year without the help that it received based on its income at the time, which was lower than its income at the end of the year.

Requiring very large repayments at tax time from people who accurately reported their circumstances but subsequently gained a job, had a child leave their home, or experienced another such change later in the year (and reported that as well) does not represent sound policy.  Congress has already raised the repayment limits to a danger point, at which a substantial number of healthy families and individuals are likely to choose to remain uninsured rather than buy coverage.  Going further in this direction could be exceedingly unwise and could threaten the viability of health reform itself.

End notes:
[1] Paul N. Van de Water, “Excise Tax on Medical Devices Should Not Be Repealed:  Industry Lobbyists Distort Tax’s Impact,” Center on Budget and Policy Priorities, Updated May 31, 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=3684. Paul N. Van de Water, “Limitation On Use Of Tax-Advantaged Health Accounts Should Not Be Repealed,” Center on Budget and Policy Priorities, June 5, 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=3789 .
[2] Minority members of the House Ways and Means Committee issued a paper dissenting from the April 2011 legislation raising the repayment amounts.  That paper cites an estimate from the Joint Committee on Taxation (JCT) that the change in that legislation would cause 266,000 people to forgo coverage.  The pending legislation would cause an additional 350,000 people to forgo coverage, according to JCT.
[3] HHS issued its final rule on the determination of eligibility for advance payments of premium tax credits in March 2012.  The preamble states that HHS intends to provide further guidance regarding attestations “that may be asked of individuals, which may include an attestation from a tax filer acknowledging that he or she understands the potential impact of reconciliation.” 77 Fed. Reg. at 18356. (March 27, 2012)
[4] The Congressional Budget Office (CBO) has estimated enrollment in the exchanges and the average per-enrollee federal premium subsidy under current law for each year from 2014 through 2022.  From this estimate, we calculated the percentage that the loss of enrollment in exchange coverage that would be caused by the proposed increase in the repayment amounts — 350,000 people according to JCT — would represent of total exchange enrollment that year.  Using this percentage reduction, we determined the enrollment loss resulting from raising the repayment caps for each year from 2014 through 2021.  For each year, we then multiplied that estimated enrollment loss by the CBO estimate of the average per-enrollee subsidy for that year to determine the federal savings associated with the enrollment loss.  Using this method, we estimate that approximately $16.8 billion (38 percent) of the savings attributed to increasing the caps are due to decreased enrollment in the exchanges.
[5] 77 Fed. Reg. at 18371. (March 27, 2012)

Economist's View this weeks links

Tuesday, June 05, 2012

Links for 06-05-2012

• Paul Krugman on fixing the global economy - Marketplace.org
• E.C.B. Under Pressure to Ride to the Euro's Rescue - NYTimes.com
• Michael Lewis on luck and entitlement - The .Plan
• Turning Our Backs on Unions - NYTimes.com
• Misguided “Fiscal Cliff” Fears - CBPP
• What Constrains the Federal Reserve? - Rortybomb
• Who took the “think” out of think tanks? - The Berkeley Blog
• Macroeconomics with Financial Frictions: A Survey - NBER
• The US economy and jobs: the basic arithmetic - Dean Baker
• The Unfunded Liabilities You Love - Nancy Folbre
• Is Global Financial Reform Possible? - Paul Volcker
• Soros on the Euro - Paul Krugman
• Unconventional Open Market Operations - Stephen Williamson
• Is the 2005 Bankruptcy Reform Working? - Liberty Street
• Fiscal Federation or Fiscal Policy - Antonio Fatas

Posted by Mark Thoma on Tuesday, June 5, 2012 at 12:06 AM

How Americans have become more polarized, in two charts

Posted by Suzy Khimm at 09:42 AM ET, 06/05/2012


There’s no question Congress has become more polarized. But it’s not just Washington that’s responsible for the sharpening political divide: ordinary Americans have become more polarized as well.
The Pew Research Center finds partisan differences among the public began increasing sharply in the beginning of the Bush administration and have risen ever since. The divide emerged from a set of “values questions” that Pew posed to participants, largely focused on policy questions like the social safety net and immigration. Here’s the percentage-point gap in the questionnaire over time:
 
(SOURCE: PEW RESEARCH CENTER) What were the issues that most divided Republicans from Democrats? The social safety net, environment, and labor unions:
 
(SOURCE: PEW RESEARCH CENTER) Pew points out that a similar partisan divide emerged among “independents,” though Pew finds that most independents actually lean toward one political party or the other.

We Need To Use The 2012 Farm Bill To Help American Farmers Prepare For Climate Change

By Climate Guest Blogger on Jun 5, 2012 at 10:37 am

 
by Matt Kasper
In the United States the biggest and most influential farm policy tool is written by Congress every five years: the farm bill.
On April 26, the Senate Agriculture Committee passed the “Agricultural Reform, Food and Jobs Act of 2012,” setting the stage for a month-long legislative wrestling match over this massive and complicated sector.
While there’s been a lot of attention turned to the $4.49 billion cut to the Supplemental Nutrition Program (SNAP), formerly known as food stamps, there are also some serious shortcomings related to climate change and crop insurance.
Crop insurance companies have paid $9.1 billion in indemnity payments to U.S. farmers for 2011 due to the historic flooding, droughts, and other natural disasters — a new record for claims in the history of the program, according to USDA’s Risk management Agency.
The Congressional Research Service projects an average of $9 billion a year on subsidized insurance premiums between 2013 and 2022; and $1.5 billion a year in payments for losses based on revenue shortfall not covered in the crop insurance program.
The problem is that the U.S. is experiencing some of the most severe floods and droughts in recent history – with extreme rainstorms in the Midwest doubling over the last 50 years and record-breaking droughts causing billions of dollars in damages.
These severe weather events are having a negative effect on crop yields, and are therefore putting more pressure on insurance claims. And it’s only going to get worse. According to climate scientists, the future holds far more devastating droughts, more floods and more heat waves.
This has resulted in the Senate looking to end direct payments to farmers and replace them with subsidized insurance programs. However, this shift does nothing to move the agricultural sector toward the solution: mitigation and adaptation to climate change.
Julia Olmstead of the Institute for Agriculture and Trade Policy explained in a recent post on the issue:

This acknowledgement of increased risk for agriculture has not, however, been coupled with any specific acknowledgement of its primary cause—climate change—or of farmers’ need to take steps to make their cropping systems more resilient to extreme weather. Yet such adaptive measures are not being talked about in the current Farm Bill debate. Creating a federal crop insurance system with no limits on federal outlays without simultaneously giving farmers the tools to adapt to the effects of climate change is incredibly irresponsible from both a food security and fiscal perspective. It’s like offering a home owner a fire insurance policy, but not even requiring the most basic preventative measures, such as smoke alarms or fire extinguishers.

It is becoming clear that farmers are facing growing stress from climate change, and that greater implementation of diversified agricultural systems is a productive way to make our agricultural systems more robust and resilient.
Subsidizing farmers $9 billion a year through a federal crop insurance program without investing in either the tools to help farmers adapt to climate change or help mitigate the problem doesn’t make sense. We need to help deploy incentives in a smart, forward-thinking way – and that means helping farmers minimize risk and build resiliency in their fields. Olmstead calls it a “climate compliance plan”:

Climate compliance would require that farmers develop and follow a USDA-approved climate adaptation and mitigation plan (either as a stand-alone plan or incorporated into an existing conservation plan) that is adapted to local conditions. In drought-prone regions this might mean selecting drought-tolerant crop varieties, changing grazing or irrigation management, or other strategies. In flood-prone areas this could mean incorporating more perennial crops, utilizing cover crops, or planting buffer strips. Just as climate change will not affect all farms equally, there will not be a one-size-fits-all prescription for adaptation. After creating a climate compliance plan, farmers can receive support from Farm Bill programs such as EQIP to offset the costs of these transitions.

Diversified systems are becoming more important for agriculture as climate fluctuations have increased. Agroforestry, for example, protects crops from extreme storm events (e.g., hurricanes, tropical storms) in which high rainfall intensity and hurricane winds can cause landslides, flooding, and premature fruit drops.
Adding a climate compliance plan to the farm bill may add some costs; however, those costs would be offset by a reduction in long-term losses.
The increase in extreme weather has made the need for better risk-management practices very clear. The 2012 farm bill could be an important platform for talking about how to prepare our agriculture for a more diverse, resilient future.
Matt Kasper is a Special Assistant with the energy policy team at the Center for American Progress. Stephen Lacey contributed to this report.

In U.S., 46% Hold Creationist View of Human Origins

Highly religious Americans most likely to believe in creationism

by Frank Newport

June 1, 2012

PRINCETON, NJ -- Forty-six percent of Americans believe in the creationist view that God created humans in their present form at one time within the last 10,000 years. The prevalence of this creationist view of the origin of humans is essentially unchanged from 30 years ago, when Gallup first asked the question. About a third of Americans believe that humans evolved, but with God's guidance; 15% say humans evolved, but that God had no part in the process.

Gallup has asked Americans to choose among these three explanations for the origin and development of human beings 11 times since 1982. Although the percentages choosing each view have varied from survey to survey, the 46% who today choose the creationist explanation is virtually the same as the 45% average over that period -- and very similar to the 44% who chose that explanation in 1982. The 32% who choose the "theistic evolution" view that humans evolved under God's guidance is slightly below the 30-year average of 37%, while the 15% choosing the secular evolution view is slightly higher (12%).

The Most Religious Americans Are Most Likely to Be Creationists

Gallup's question wording explicitly frames the three alternatives in terms of God's involvement in the process of human development, making it less than surprising to find that the more religious the American, the more likely he or she is to choose the creationist viewpoint.

Two-thirds of Americans who attend religious services weekly choose the creationist alternative, compared with 25% of those who say they seldom or never attend church. The views of Americans who attend almost every week or monthly fall in between those of the other two groups. Still, those who seldom or never attend church are more likely to believe that God guided the evolutionary process than to believe that humans evolved with no input from God.

Majority of Republicans Are Creationists

Highly religious Americans are more likely to be Republican than those who are less religious, which helps explain the relationship between partisanship and beliefs about human origins. The major distinction is between Republicans and everyone else. While 58% of Republicans believe that God created humans in their present form within the last 10,000 years, 39% of independents and 41% of Democrats agree.

Those With Postgraduate Education Least Likely to Believe in Creationist Explanation

Americans with postgraduate education are most likely of all the educational groups to say humans evolved without God's guidance, and least likely to say God created humans in their present form within the last 10,000 years. The creationist viewpoint "wins" among Americans with less than a postgraduate education.

Implications

Despite the many changes that have taken place in American society and culture over the past 30 years, including new discoveries in biological and social science, there has been virtually no sustained change in Americans' views of the origin of the human species since 1982. The 46% of Americans who today believe that God created humans in their present form within the last 10,000 years is little changed from the 44% who believed this 30 years ago, when Gallup first asked the question.
More broadly, some 78% of Americans today believe that God had a hand in the development of humans in some way, just slightly less than the percentage who felt this way 30 years ago.
All in all, there is no evidence in this trend of a substantial movement toward a secular viewpoint on human origins.
Most Americans are not scientists, of course, and cannot be expected to understand all of the latest evidence and competing viewpoints on the development of the human species. Still, it would be hard to dispute that most scientists who study humans agree that the species evolved over millions of years, and that relatively few scientists believe that humans began in their current form only 10,000 years ago without the benefit of evolution. Thus, almost half of Americans today hold a belief, at least as measured by this question wording, that is at odds with the preponderance of the scientific literature.

Survey Methods Results for this USA Today/Gallup poll are based on telephone interviews conducted May 10-13, 2012, with a random sample of 1,012 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2011 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
View methodology, full question results, and trend data.
For more details on Gallup's polling methodology, visit www.gallup.com.

Majority in U.S. Dissatisfied With Next Generation's Prospects

About half are satisfied with Americans' willingness to work hard to get ahead

by Lydia Saad

June 4, 2012

PRINCETON, NJ -- Nearly six in 10 Americans are currently dissatisfied with the opportunity for the next generation of Americans to live better than their parents. Older Americans are particularly unhappy on this question, but on balance, the majority of young adults are negative as well.

The idea of America as a place where citizens can rise above their economic position at birth depends partly on an economic system that rewards people based on effort and merit -- not race, class, title, or other social barriers -- and partly on Americans' willingness to make a serious effort to succeed. Americans themselves currently have doubts about both aspects of that equation.
Fifty percent of U.S. adults are satisfied with "the opportunity for a poor person in this nation to get ahead by working hard"; 48% are dissatisfied. Satisfaction with "Americans' willingness to work hard to better themselves" is similarly mixed, with 52% satisfied and 45% dissatisfied.
Americans of all ages have similar perceptions about the existence of merit-based opportunity in the country, with about half of each age group saying they are satisfied with it. However, young and middle-aged adults are a bit less positive than are those 55 and older about Americans' willingness to work hard to better themselves.

These results are based on a USA Today/Gallup poll conducted May 10-13 and could have implications for how Americans perceive President Barack Obama's job performance when deciding whether to support his re-election bid next fall.

Democrats Most Upbeat About American Dream

Among partisan groups, Democrats today are the most upbeat about the financial opportunity available to the next generation, but only on a relative basis. Less than half of Democrats (48%) are satisfied with the opportunity for the next generation to live better than their parents, compared with 37% of Republicans and 35% of independents.
Democrats are also significantly more likely than Republicans to feel satisfied with Americans' willingness to work hard to get ahead, 59% vs. 47%. At the same time, Republicans are a bit more likely than Democrats to be satisfied with the opportunity a poor person has to get ahead through hard work, 56% vs. 50%.
These distinctions may reflect that Democrats are more inclined than Republicans to be positive about national conditions when a Democratic president is leading the nation. Republicans' greater satisfaction, relative to Democrats', with the possibility of pulling oneself up by one's bootstraps aligns with their more conservative political credo.

While subdued in absolute terms, Americans' satisfaction with the next generation's prospects of living better than their parents and with effort-based opportunity are in fact higher than at times in 1992 and 1994, when Gallup previously asked these questions. However, satisfaction with Americans' willingness to work hard to better themselves is unchanged from the two prior times Gallup asked the question, both in 1992.

Bottom Line

Americans are highly ambivalent about the nation's success at meeting the promise of the American Dream. Nearly half seem to doubt that Americans have either the willingness or the opportunity to get ahead through hard work. And perhaps as a result, they are generally dubious that the members of the next generation have the opportunity to be better off than their parents. Whether this pessimism hurts Obama's chances for re-election isn't clear, but it suggests there isn't a broad sense of optimism about American economic opportunity to help him.

Survey Methods Results for this USA Today/Gallup poll are based on telephone interviews conducted May 10-13, 2012, with a random sample of 1,012 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2011 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
View methodology, full question results, and trend data.
For more details on Gallup's polling methodology, visit www.gallup.com.

Romney Edges Obama in Battle for Middle-Income Voters

June 4, 2012

Obama has wide lead among lower-income voters

by Jeffrey M. Jones

PRINCETON, NJ -- Mitt Romney currently has a 49% to 45% edge over Barack Obama among middle-income voters, those whose annual household income is between $36,000 and $89,999. Romney has the same lead among upper-income voters, while Obama maintains a wide advantage among lower-income voters.

The results are based on Gallup Daily tracking of 2012 election preferences by demographic group, including more than 9,000 interviews with registered voters conducted between May 14 and June 3. During this period, Obama and Romney were tied at 46% among all registered voters.
Voting preferences by income group have been fairly well-established since Gallup began tracking the general election on April 11. Obama's lead over Romney among low-income voters has ranged between 13 and 16 percentage points in each of the three-week rolling averages of the vote by demographic group that Gallup has reported since late April. Meanwhile, Romney's edge among middle-income voters has been between four and seven points, and among upper-income voters, between four and six points.
Romney, the wealthy former head of Bain Capital, has slightly greater appeal to the highest-income voters in Gallup's data, those making $180,000 or more in annual income. This group has shown a 53% to 42% preference for Romney since mid-April, compared with 50% to 45% for Romney among those earning between $90,000 and $179,999.

Race a Factor in Obama Support Among Lower-Income Voters

In each of the three major income groups Gallup reports, there are strong racial divides in voting preferences. Non-Hispanic whites and nonwhites show stark differences in their candidate preferences.
In Gallup tracking since April 11, Romney is the leader among whites in all income groups, including those who are lower income. At the same time, Obama has a commanding lead among nonwhites in all income groups.

Obama's large lead among low-income voters overall is due to two factors. First, as the prior table shows, lower-income nonwhites prefer Obama to Romney by a 68-point margin, compared with smaller 55-point and 52-point margins among middle- and upper-income nonwhites, respectively. At the same time, Romney has a smaller lead among lower-income white voters (10 points) than among middle- (19 points) or upper-income white voters (14 points).
Second, and perhaps more importantly, nonwhites fall disproportionately into the lower-income group. Nearly half of nonwhites, 49%, report annual household incomes of less than $36,000. And 38% of those in the lower-income group are nonwhite, compared with 22% of those in the middle-income group and 17% in the upper-income group.

Romney Leads Among Middle-Income Independents

Though Romney's edge among middle-income voters is similar to his lead among upper-income voters, in certain subgroups of middle-income voters he performs especially well. That includes middle-income independent voters, who right now prefer Romney by an eight-point margin, 48% to 40%. Obama leads among lower-income independents, and the two are tied among upper-income independents.

Romney and Obama predictably hold large leads, no less than 72 percentage points, among party supporters across the income spectrum.

Middle-Income Women Divided in Their Vote Choices

Much has been made in this campaign of the gender gap in voter preferences, with Obama faring better among women and Romney among men.
However, there are variations in the vote pattern by gender within income group.
Lower- and upper-income women show solid preferences for Obama. However, middle-income women are much more closely divided, with 48% favoring Obama and 45% Romney.

Whereas middle- and upper-income men show solid support for Romney, lower-income men show nearly equally solid support for Obama.

Implications

U.S. voters' 2012 preferences so far align with the perception of the Democratic Party as the party of the poor and the Republican Party as the party of the rich. Obama holds a wide lead among lower-income voters, in large part due to the high concentration of minority voters in this group, while Romney holds a smaller, but significant, edge among upper-income voters.
During the campaign, both presidential candidates will do their best to convince middle-income voters that their policies will be more beneficial to the middle class. So far, middle-income voters are more likely to support Romney than Obama. And within the middle-income group, Romney is running stronger among political independents and is competitive with Obama among middle-income women.
It will be especially important for Obama to improve his standing among middle-income voters because his large advantage among lower-income voters is offset to a degree by their lower level of voting participation. Gallup's tracking data show that an average of 69% of lower-income voters say they will "definitely" vote in the election this fall, compared with 83% of middle-income voters and 87% of upper-income voters.
Track every angle of the presidential race on Gallup.com's Election 2012 page.
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Survey MethodsResults are based on telephone interviews conducted as part of Gallup Daily tracking May 14-June 3, 2012, with a random sample of 9,015 registered voters, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of registered voters, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage points.
For results based on the total sample of 2,393 registered voters living in households with less than $36,000 annual income, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
For results based on the total sample of 3,285 registered voters living in households with annual incomes between $36,000 and $89,999, one can say with 95% confidence that the maximum margin of sampling error is ±2 percentage points.
For results based on the total sample of 1,803 registered voters living in households with $90,000 or more annual income, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2011 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details on Gallup's polling methodology, visit www.gallup.com.

Election Matters: Using History to Assess Obama's Re-Election Chances

May 29, 2012

Gallup Editor-in-Chief Frank Newport and USA Today Washington Bureau Chief Susan Page reveal that President Obama is better positioned now than Jimmy Carter and George H.W. Bush were when they lost their re-election bids, but Obama is doing worse than Ronald Reagan and Bill Clinton, incumbents who won a second term.

Election Matters: Obama and Romney Have Starkly Different Economic Strengths

May 22, 2012

Gallup Editor-in-Chief Frank Newport and USA Today Washington Bureau Chief Susan Page discuss how Americans assess President Barack Obama and Mitt Romney on various economic issues, identify which economic issues may be most important in the upcoming presidential election, and reveal the candidate who is leading among smokers.

Election Matters: Americans' Election Predictions

May 15, 2012

Gallup Editor-in-Chief Frank Newport and USA Today Washington Bureau Chief Susan Page reveal that a majority of Americans expect that President Obama will beat Mitt Romney in this year's presidential election and discuss the political implications of Obama's public support for same-sex marriage.

Waiting for Comprehensive Waiting-Time Stats

May 25, 2012, 8:12 PM

By Carl Bialik 

Carl Bialik examines the way numbers are used, and abused.

My print column explores the challenges facing medical watchdogs who want to assess how long patients must wait to get treatments, and evaluate programs designed to reduce delays.
The challenges were highlighted by a report out earlier this year from the U.S. Department of Veterans Affairs’ Office of Inspector General, which found that waiting times for mental-health appointments were longer than the VA’s internal statistics indicated.
The VA concurred with the assessment and has outlined a plan to address the shortcomings. One of them is a 25-year-old-scheduling system of the “blue-screen, roll-and-scroll” variety, according to Michael Davies, an internist and the VA’s acting director of high reliability systems and consultation. “The plan is to replace it,” Davies said. “In the last 25 years, there’s been a lot of work in the private sector on creating some really wonderful scheduling systems. So our plan is to buy one of those scheduling systems and adapt it for use in the VA” — if the agency gets funding to do it.
Gordon P. Erspamer, a San Francisco attorney who has represented veterans who have sued the VA for delaying treatment, said that even improved software wouldn’t be immune to false data that could be reported by staff members seeking to reduce waiting times artificially. “The problem is, when you have a system as complicated as this, there always are ways to tweak the numbers to make them look better,” Erspamer said.
Mary Schohn, director of the VA’s mental-health operations, said that anyone who falsifies data would be subject to “disciplinary actions.” She added, “That’s not a culture we want to engender within the VA.”
The U.K.’s National Health Service has gotten better at measuring waiting times from a few decades ago, when it counted only how many people were waiting for a procedure and not how long they wait, according to John Appleby, chief economist of the King’s Fund, an independent health think tank in London, and visiting professor at City University London. Yet controversies persist over how to present the data, and over their accuracy.
“Especially because the government has put a lot of pressure on reducing waiting times, I suspect there’s an issue with data quality,” Appleby said, emphasizing the importance of auditing and monitoring the numbers. “You may have what you think are good measures. Whether people are filling in forms correctly is another matter.”
As hard as it is for agencies to measure their own performance, it is far harder to compare agencies or countries on the basis of how long patients wait for treatment. “It would be terrific if we could get” waiting-time data for different health-care providers, said Anne-Marie Audet, vice president for health system quality and efficiency at the Commonwealth Fund, a New York foundation that aims to improve health care. “We don’t have that yet.”
Comparing countries can be even tougher, according to Luigi Siciliani, an economist at the University of York’s Centre for Health Economics, who has worked on such international comparisons. “Patients differ in their wait, so you have a distribution of waiting times,” Siciliani said. Governments report different measures: the mean, the median, the proportion of patients waiting more than x months/weeks. The waiting time of the patients at 90th percentile.” Also, even when data are available, it’s not always clear how to combine, say, waiting times on the order of months for a hip replacement, and of hours for emergency treatments such as surgery after hip fracture. “So, aggregation is a big issue,” Siciliani said.
Appleby hasn’t found comparable numbers between the U.K. and France — nor even between England and Scotland. “I’ve tried to do this myself,” he said. “We can’t even do it within the U.K.”

• • • :37 pm May 30, 2012
    • Anonymous wrote :
    Just read your article on the wait times. Extremely interesting, and I would say just the start. I presently work for the VA and found this very salient AND very frustrating, b/c I just finished 80 chart reviews for the higher reviewers to find out if the schedulers are fudging the numbers, cooking the books, etc. I had completed the same chart reviews 6 months ago for the same reasons. Congress and Veteran Service Organizations are looking into the discrepancy between what the VET is saying from the VSOs and then what the higher level administrators are reporting.
    The VHA of course is stating that everything is all rosy and great, even though in reality the VETS are really getting a raw deal with long wait times especially for audiology and rehab medicine. The problem is that nobody who is in charge of the hospitals want to tell the truth because they will not get their bonuses and performance pay. People in the VHA who are leaders are not capable at this point of really keeping the VET in mind by telling everybody the truth. The truth is that VETS are waiting up to 2-3 months to get into speciality and also to get a PCP appt in high population areas.
    I could go on and on about how the statistics and the archaic appt menu system needs to be changed.
    It does not take a rocket scientist to look and ask the question: ‘why is everybody being seen within the 14 days of the desired date” , but the the third next available appt time is out 3 months? REALLY?
    I think a journalist like yourself could do every Veteran in this country a favor by doing some investigative reporting about this issue.
    The house of smoke and mirrors is alive and well, and of course charging the country for admission.
    Keep up the good work….the data is out there and you are smart enough to drill down to the reality of the situation! We need people like you.
• • • 10:24 am May 28, 2012
    • Don L wrote :
    I suppose that an imperfect measure of wait time is better than no measure at all. As long as people understand the limitations, it could still be useful. Certainly, the relative improvement (or the opposite) as a function of time could be observed. The airlines certainly attempt to game their arrival time performance, but there is still some value in the numbers. Of course, the wait time is but only a measure of the performance of the health care system. You could have a short wait time for an appointment, but what about the effectiveness of said appointment?