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International efforts, such as the Paris Agreement, aim to reduce greenhouse gas emissions. But experts say countries aren’t doing enough to limit dangerous global warming.
Morning Brief: Debt Ceiling Battle Looms
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Reuters discusses yesterday’s White House meeting, where President Obama and Speaker Boehner argued over what provisions could be attached to the next debt limit increase, expected in early 2013. Boehner wants spending cuts and reforms larger than the amount of the debt ceiling hike, while Obama wants to separate the debt limit from the budget. The Washington Post summarizes the political considerations and how automatic actions such as the spending cuts from the last debt ceiling vote and the expiration of the Bush-era tax rates would reduce the deficit.
Earlier this year, CFR’s Edward Alden discussed the CBO report on the budget impact of current legislation if Congress does not act. While he states that no action would be bad policy, he suggests that Congress take the current law as a budget baseline.
Herd of Big Money Bond Bulls Thins
Despite their strong performance in 2011, few influential money managers and investors advocate buying U.S. government bonds, and many are now urging a switch back to stocks (Reuters). As investors allocated more money to U.S. Treasuries, bond prices rose, driving yields to record lows, and lowering the cost of financing the federal deficit. Despite the expert opinions, many retail investors continue to buy U.S. Treasuries as a bulwark against uncertainty caused by everything from Greece’s potential exit from the Euro to JP Morgan Chase’s recent $2 billion loss.
As the United States continues to run budgets with high deficits, politicians debate different plans to reduce government costs and to raise revenue. This CFR Backgrounder by Jonathan Masters outlines the competing policy paths on federal fiscal reform, and the global consequences for failing to bring down U.S. debt.
Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.
Corporate Regulation and Taxation
Fitch Gauges Impact of Basel III
Fitch Ratings released a report on the impact of the global Basel III guidelines that take effect at the end of 2018. The report said twenty-nine global systematically important banks will need to raise a collective $566 billion dollars in additional equity to satisfy stricter capitalization rules or pare their $47 trillion in combined total assets. Banks in Europe and the United States will face different challenges (FT). U.S. banks will suffer because capital requirements increase for risky activities, while European banks will have less flexibility in defining capital.
Corporate regulation and taxation. Read more from top economists and business experts on solutions for addressing corporate tax reform.
Education and Human Capital
SAT to Align to Common Core
Education Week reports that the next president of College Board, creator of the SAT and AP tests, plans to align the SAT to the Common Core State Standards (CCSS). David Coleman will take the reins at College Board on October 15. He is a co-founder of Student Achievement Partners, the lead author of the CCSS. Coleman believes that modifying the SAT to follow CCSS will give an assessment matching expectations that follows the steady progress of students, though others are concerned about the ramifications of altering the well-established test.
The report of the CFR Independent Task Force on U.S. Education Reform and National Security highlights the importance of CCSS and asserts that fixing the nation’s underperforming K-12 schools is critical to economic competitiveness and national security.
Education Statistics under Review
The Department of Education’s National Center for Education Statistics (NCES) is reviewing its high school data after erroneous data skewed rankings (Education Week). U.S. News & World Report’s annual “Best High Schools” rankings gave high positions to some schools that were undeserved because data from NCES’s Common Core of Data (CCD) were faulty. CCD encompasses over 100,000 schools, and NCES is currently reviewing data for over 5,000 high schools.
Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.
Innovation
How Stanford Teaches Innovation
The dean of Stanford’s business school believes that innovation stems from people who act as “change agents” (WSJ). According to Dean Saloner, effective change agents need to: identify problems and solutions, apply creativity, and get things done. Schools can mold future business leaders into change agents by engendering skills in analysis, creativity and leadership.
Innovation. Read more on how the U.S. capacity to innovate could play a chief role in economic growth.
The Morning Brief is compiled by Renewing America contributor Steven J. Markovich.
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