Student Loan Forgiveness Treats the Symptoms and Not the Disease

President Biden’s student loan forgiveness plan was met with vocal responses from proponents and opponents alike. Some believe the action is essential to raise living standards and help those struggling to make ends meet. On the other hand, critics contend that forgiving loans will only fuel inflation and provide a handout to the rich. What is missing from the conversation is the reality that student loan forgiveness treats the symptoms without treating the actual disease of sky-high tuition. The primary  aspect of President Biden’s plan is the proposed forgiveness of between $10,000 and $20,000 dollars for eligible borrowers. However, the plan also includes restructuring how the federal government calculates monthly payments, which is currently calculated by taking 10 percent of non-discretionary income—earnings minus necessary spending. The Department of Education proposed raising the non-discretionary income limit and Biden took this one step further by slashing the monthly payments from 10 percent to 5 percent of non-discretionary…

Durbin’s Broken Promise

…the large sums merchants paid in interchange fees, it’s no surprise that Congress has expressed an interest in intervening. While interchange fees generate substantial sums for U.S. banks and networks like Visa, Mastercard or American Express, they are an essential part of the banking ecosystem, enabling investment in cybersecurity and fraud detection and covering the costs associated with fraudulent transactions. When global cybercrime is estimated to cost $10.5 trillion by 2025, government-mandated price reductions, which would diminish revenues for banks and payment networks, would make it easier for bad actors to access sensitive financial information. Prohibiting exclusivity on processing networks would also make it impossible for co-branded credit cards and rewards programs to exist. Co-branded credit cards, which were once almost exclusively offered by airlines and hotels, have proliferated over the last few years, with “household names including Apple, Expedia, PlayStation, and Uber all have cards bearing their names.” These…

House Bill Expands Telehealth Access

More than a third of Americans live in an area with a shortage of healthcare professionals. For these 122 million people, that shortage can mean longer wait times and delayed access to essential care. For patients living in rural areas, attending in-person health appointments can also require them to pay steep travel costs while sacrificing time that could be better spent working or with family. Fortunately, telehealth, in which appointments take place online or over the phone, provides an opportunity for these millions of rural Americans to receive care without visiting a health clinic. During the COVID-19 pandemic, telehealth became a lifeline, allowing patients and doctors to interact safely, flexibly, and quickly. Before the pandemic, approximately 840,000 encounters per year between doctors and consumers on Medicare employed telehealth. One year later, amid the national health emergency, 52.7 million appointments relied upon telehealth infrastructure, an increase of 6,300 percent.  While the…

Menthol Bans Will Spell Financial Hit to State Coffers

Back in March, the Food and Drug Administration (FDA) announced it was planning “to prohibit menthol as a characterizing flavor in cigarettes and prohibit all characterizing flavors (other than tobacco) in cigars.” The proposal is rooted in the agency’s desire to “significantly reduce disease and death from the use of combusted tobacco products, the leading cause of preventable death in the U.S., by reducing youth experimentation and addiction and increasing the number of smokers that quit.” While the desire to have fewer Americans smoke is a good public policy, a prohibition on menthol cigarettes and flavored cigars could have significant health and financial ramifications beyond Washington, denying all 50 states access to an essential source of revenue. While public finances should never trump public health, policymakers must consider the full ramifications of their decisions before proceeding with any new rules. Failing to do so could create more intractable problems further…

Stablecoin Legislation Seeks to Preserve the Growth of Blockchain-Based Currency

…Federal Trade Commission (FTC). In addition to these two agencies, cryptocurrencies can also be covered by the Commodity Futures Trading Commission, the Internal Revenue Service, or the Financial Crimes Enforcement Network. If  passed, the Stablecoin TRUST Act would clarify some of the regulatory confusion for stablecoins by establishing that stablecoins are not securities, and would therefore not fall under the purview of the SEC. According to Brummer, this would put the stablecoins under the FTC’s jurisdiction. The bill also creates a federal license for Stablecoin issuers with specific requirements such as capital requirements, liquidity requirements, risk management, and reserve asset requirements to protect the value of stablecoins for the owners of the currency. Clarifying regulatory confusion is essential as uncertainty inhibits the growth and widespread use. Telegram already announced in 2020 that it would discontinue operations in the U.S. due to regulatory uncertainty and disagreement over whether the company’s offerings were subject…

Congress Must Act Quickly to Ensure the FCC’s Spectrum Authority is Reauthorized

The Federal Communication Commission (FCC), which is tasked with hosting annual auctions for commercial wireless providers, may soon lose the ability to license radio frequency bands if its spectrum authority expires on September 30th. The FCC’s current authority only lasts for 10 years and must be renewed by Congress. Should Congress fail to act in a timely manner, the consequences could be devastating. The FCC collects billions of dollars each year from the sale of spectrum. This money is used to offset public debt and pay for a variety of important public projects such as FirstNet emergency communication networks. It also provides the federal government with a steady stream of revenue that cannot be easily replaced. To do so would require raising taxes on Americans who can ill afford higher costs during a time of high inflation. Yet, after the July 29th auction of the 2.5 Gigahertz band licenses, the…

ACI Files Comments with the U.S. Postal Commission Regarding Contributions to Institutional Costs

…and package segment has accelerated 22.9 percent in just a two-year period (7,578,000 units in FY2021 compared 6,165,000 in FY2019).[2] Despite growth of the product segment that the Postal Service considers an essential competitive market venture, and critical to the formation of a modern postal system, the institution’s financial difficulties have notably accelerated. While Congress has largely absolved the USPS’ net losses of $9.2 billion and $4.2 billion during the pandemic years, and for many years prior, significant concerns remain. Specifically, the Postal Service Reform Act omits business and operational overhauls that would counteract escalating losses stemming from its own decision-making and authority. The Postal Service has cumulatively posted $11.6 billion in controllable losses since FY2018 and it projects to lose $4.1 billion in FY2022.[3] It should concern the Commission that the origin of such operational losses largely remain unknown, especially as expenses are projected to grow beyond the institution’s…

American Consumer Institute Finds Current Efforts to Target Large Tech Firms May Harm Consumers

…Steve Pociask dispels the notion that the existence of large firms in certain markets will harm consumers. He writes, “is the diffusion of market power across a handful of large firms more concerning than concentrating all of that power in the hands of a single government agency?” His work shows that large companies can, in many cases, “increase productivity and lower consumer prices” for consumers. “The key to antitrust enforcement,” he writes, “is whether consumer welfare is lessened.” He concludes that retaining a consumer welfare test is essential to justifying any antitrust actions. ACI’s latest ConsumerGram should serve as a warning to lawmakers and federal regulators not to rush ahead and make antitrust laws overly strict without first considering the harm that blanket restrictions may have on consumers. In the end, these regulations should be about making consumers better off, not worse off.   You can read the ConsumerGram online….

ACI Comments on DOE’s Proposed Changes Regarding 90/10 Rule and Career College Impacts

…return on investment for low-income students found that when accounting for graduation rates and earnings of Pell Grant students, the bachelors-level colleges with the best return on investment for low-income students are two for-profit colleges, the Neumont College of Art and Design and SAE Expression College. The same study found that when ratings are designed to reflect graduation rates and long-term earnings, six of the top ten associate’s level colleges were private for-profit institutions. Career and proprietary colleges play an essential role in our education system, and we should think carefully before enacting measures that will punish students who freely choose to attend these schools. If the Department truly wants to help students, then the best course of action would be system-wide transparency and accountability measures to ensure that every student can get the quality education they need. We would be happy to work with you on developing these standards….

The Economic Standard: DOE’s War on Career Colleges Will Harm the Very Students It Seeks to Help

…comparing nonprofit and proprietary schools, Heritage Foundation found that “when apples to apples comparisons are made between program types, for-profit colleges even graduate students at higher rates than their traditional college counterparts.” A recent Georgetown University study focused on return on investment for low-income students found that when accounting for graduation rates and earnings of Pell Grant students, the bachelors-level colleges with the best return on investment for low-income students are two for-profit colleges, the Neumont College of Art and Design and SAE Expression College. The same study found that when ratings are designed to reflect graduation rates and long-term earnings, six of the top ten associate’s level colleges were private for-profit institutions. Career and proprietary colleges play an essential role in our education system and DoE’s scapegoating of these institutions are harming students. Instead, the Department should implement system-wide transparency and accountability measures to ensure that every American can…