Heartland Institute Experts Take Issue with Democrats’ ‘Innovation Agenda’

Published May 29, 2007

In late April, the U.S. House of Representatives took the first of many anticipated steps to implement the Democrats’ “Innovation Agenda: A Commitment to Competitiveness.” The House voted on bills that address education, research, and small business development.

Heartland Institute experts on a wide range of issues–education, health care, environment, telecommunications, and more–have commented on the Democrats’ agenda. Their statements follow. The statements may be quoted in full or in part. Alternatively, we encourage you to contact the experts directly at the email addresses provided. For more information about The Heartland Institute, contact Harriette Johnson, mainstream media specialist, at 312/377-4000, [email protected].

The Intrusion Agenda
S. T. Karnick ([email protected]) is research director for The Heartland Institute.

As if the expansion of government interference in Americans’ lives under President George W. Bush weren’t enough already, House Speaker Nancy Pelosi and her fellow Democrats propose an “Innovation Agenda” that will extend the reach and tighten the grip of government’s tendrils much further.

It should be called the Intrusion Agenda, because that’s really what it is.

Pelosi and the Democrats propose to insert the national government into individual, local community, and state decisions about who teaches what in our schools at every level. They would destroy the higher education student loan market through price caps. They want to entice farmers to divert production away from food, making it more costly, in order to produce extravagantly expensive biofuels that won’t appreciably reduce our use of fossil fuels or do anything about global warming.

They would strangle our nation’s amazingly productive and innovative research and development infrastructure by putting the federal government in charge. They intend to have bureaucrats in Washington, DC decide what fuels we should produce and how we use them. They want to put the federal government in charge of the Internet and wireless communications by replacing innovative market solutions with intrusive government mandates. And they want to push the federal government into the decision-making processes of our nation’s small businesses, our greatest job-creators.

And that’s just the parts they’re willing to tell us about. Pelosi and the Democrats are making the most misguided aspects of the Bush agenda the model for a huge further expansion of government power over our lives.

The Democrats’ plan is no innovation: It is even more of the big-government meddling we have suffered under for decades. We don’t need an Intrusion Agenda–we need, as Ronald Reagan said, to “get the government off the backs of the people.”

Now that would be an innovation!

Much Study, Many Bad Ideas
Maureen Martin ([email protected]) is senior fellow for legal affairs at The Heartland Institute and managing editor of Lawsuit Abuse Fortnightly.

The House Democrats’ “Innovation Agenda” is clearly the product of much study and many bad ideas.

First, at least some of this agenda is blatantly unconstitutional, particularly the notion that the U.S. Constitution supports in any way a role for the federal government in fostering education in the sciences, math, engineering, or any other area.

The late Chief Justice Rehnquist said it well in the 1995 Supreme Court decision in United States v. Lopez, which overturned a federal statute that would have declared areas surrounding local schools as “gun free” zones. Congress had sought to justify this regulation under the Constitution’s Commerce Clause, on the theory that guns interfered with the learning environment that prepared students for the workplace, and thus interfered with interstate commerce.

If that regulation were allowed to stand, Rehnquist warned, Congress could also regulate “what is taught in local schools” because this could have “a substantial effect on interstate commerce.” He noted the Constitution grants only limited powers to the federal government, and that regulation of education is not among them. Rather, this is reserved to the states.

Rehnquist’s fears have now come true in the Innovation Agenda, which would be a big step in the direction of federal government regulation of “what is taught in local schools.” The Democrats propose a variety of programs affecting teacher hiring and school curricula. As if Washington politicians don’t already interfere enough with our schools, now they want to decide who teaches there and what they teach!

That’s not a recipe for fixing our schools; it’s a plan to impose national uniformity that will destroy whatever good ones we still have. As in the Lopez case, the Democrats’ lofty goals disguise a huge expansion of national control over local schools, a proposal that is blatantly unconstitutional.

Another problem with the Innovation Agenda is its weakening of higher education, which has not yet fallen prey to many of the pathologies inherent in our worst K-12 schools. Here, too, the Democrats propose to manipulate decisions about who teaches and what they teach. But in this case they are adding destructive proposals about how education will be paid for. In particular, they propose to destroy the market for low-interest student loans through price controls, which will shrivel access to higher education for bright students from less-privileged backgrounds.

The secret to becoming a scientist or engineer, or almost anything else, is simply hard work. The “brain drain” away from the scientific disciplines reportedly stems from their inherent difficulty, as students are lured into easier curricula. No amount of taxpayers’ money will change that. What is required instead is to restore to parents and local communities greater autonomy over the schools at the K-12 level, so schools will base their hiring and curricula on what will benefit the students, and to increase access to higher education by letting the market work toward real innovation.

Giving citizens more control over their schools would create a renewed emphasis at the K-12 level on the notion that the learning process may not always be fun, but the end of that–when you know things and can do things–is not only fun but is what brings the joy of a productive life. And when those children want to go to college, our society will have provided a great variety of options from which to choose. Giving Washington even more power over our schools will do the very opposite.

Education Reform: A Few Good Ideas
Robert Holland ([email protected]) is senior fellow for education policy with The Heartland Institute.

While the “Innovation Agenda” of Speaker Nancy Pelosi and the House Democrats appears to be more about PR than true innovation in mathematics and science education, it is not entirely devoid of good ideas.

One of them, embodied in a bill that passed the House of Representatives 389-22 on April 27, would provide competitive awards to universities that ensure aspiring teachers of K-12 math and science receive a solid grounding in academic content in the universities’ math and science departments. All too often, school of education courses in “how to teach” math and science substitute for intellectual mastery of subject matter by future teachers.

Another provision in the House bill would increase scholarship aid available for college students who commit to becoming intellectually well-prepared math and science teachers, who are in notoriously short supply in elementary and secondary schools. The goal is to generate 10,000 new math and science teachers annually.

Still, those are modest steps that don’t merit all the slick and pricey PR. A truly innovative initiative would encourage states to allow accomplished scientists and mathematicians to teach in secondary schools without having to jump through all the certification hurdles that governments and the education establishment put in their way.

Sticking with the Status Quo
Ralph Conner ([email protected]) is local legislation manager of The Heartland Institute.

The congressional Democrats say they want to “create a new generation of innovators: an educated, skilled workforce in the vital areas of science, math, engineering, and information technology.”

That sounds nice, but real innovation requires that we concentrate on what students really need. The Democrats’ agenda does the exact opposite. The crisis in American education is low student achievement. Rather than focus on that, the Democrats have remained true to their support base, concentrating their vision on further bloating the teacher unions, to the exclusion of strategies to achieve quality education for children trapped in dysfunctional public schools.

The Democrats’ second plank is to “place a highly qualified teacher in math, science, and technology K-12 classrooms by offering upfront tuition assistance to undergraduates.” The idea is to bribe some new teachers to work at poorly performing schools–with the poor instructors of those schools undoubtedly being transferred to other poorly performing public schools.

The proposals to cut the interest rate on loans and give more Pell grants for teachers, and pushing for more statewide coalitions of education, business, and community leaders, are nothing more than window dressing for a vapid vision of K-12 progress in which more money for teachers is always the answer.

Thinking there must be more to this “innovation” racket than meets the eye, I examined the Web sites for the Democrat-led House and Senate committees. That exercise revealed the greater truths of the innovation agenda.

The “10,000 Teachers, 10 Million Minds” Science and Math Scholarship Act, offered in the U.S. House of Representatives Committee on Science and Technology, provides scholarships for teachers to receive the education they should have had as undergrads, and gives new undergrads scholarships that bribe them to teach for six years in public schools or the grants will become loans. Thus a plan to trap teachers in the same failed K-12 schools as the students are trapped in is being heralded as progress.

The policy thrust is teachers, teachers, and teachers. Not students. Not performance.

While teachers are being celebrated and the Democrats propose to apply greater government resources to higher education (with the usual strings attached, and more to come), the reality is that we can’t do higher education well any more because students are coming in so poorly prepared. No U.S. higher education school has won the Association of Computing Machinery International Collegiate Programming Contest since 1997. According to Intel’s director of corporate affairs, Tracy Koon, “Our students in K-12 don’t do well in international tests in math and science. We have too few students entering degree programs in math and science. … [W]e have a problem.”

So much for the Democrats’ “innovation agenda” and its impact on school reform for K-12 students. Contrast this charade with the Bush administrations FY 2007 budget plans. Bush proposed:

  • America’s Opportunity Scholarships for Kids funded at $100 million to provide vouchers to parents with children enrolled in schools slated for restructuring under No Child Left Behind (meaning public schools that consistently perform poorly).
  • Voluntary public school choice flat-funded at $26 million.
  • Charter school grants funded at $215 million.
  • An Even-Start program for $99 million to expand family literacy programs in low-income areas.
  • A States Scholars Capacity Building program that rewards high school students for completing a four-year program of study, during which they are tested in math and reading during the last two years of study.

If the Democrats truly want to become a party of innovators, I suggest they consider modeling themselves after one of their unheralded colleagues, showing a profile in courage a few years ago in what was her finest hour: Senator Dianne Feinstein of California. Feinstein courageously supported the program providing vouchers to 2,000 low-income District of Columbia students in poorly performing public schools so that the children could attend any school, public or private, of their family’s choice.

The real innovation would be for Democrats to start caring less about teachers and more about students.

No Help for Small Business
Steve Stanek ([email protected]) is research fellow and managing editor of Budget & Tax News at The Heartland Institute.

Democrats in their “Innovation Agenda” say small businesses need the federal government to give them greater access to capital and “public-private partnerships” related to investments in research, technology, and other areas.

Yet most of the 25 million small businesses (fewer than 500 employees) in this country are doing just fine, thank you, employing half of all workers outside government and producing half of the nation’s private non-farm gross domestic product.

The federal government already has programs for small businesses and they are a flop. Despite a federal Small Business Administration loan program, 99 percent of all small business loans made each year have no federal backing. Small businesses don’t need government guarantees to raise money. Other programs, such as small business preferences for landing government contracts, also amount to a drop in the bucket of small business activity.

If lawmakers really want to help small businesses, they need to do so with programs that are transparent and available to all small businesses, not just those that meet certain government requirements.

They could start by reducing the outrageous burdens imposed by regulations. In a 2005 study for the Small Business Administration, economist Mark Crain of Lafayette College estimated that federal regulations cost small businesses 45 percent more per employee than large companies. For manufacturers with fewer than 20 employees the cost was an astonishing $15,747 per employee, more than triple the $4,970 cost per worker for companies with 21 to 499 workers.

Lawmakers could also enact tax relief and simplify the tax system, but the pledge by Democrats to follow “pay-as-you-go” budgeting all but eliminates that possibility, because “pay-go” ensures that taxes go up as spending goes up. The irony in “pay-go” budgeting is the overwhelming evidence that government revenues go up more not with tax hikes but with increased economic activity that tax cuts help stimulate.

More than 90 percent of small business owners file their taxes as individuals, not as corporations. Lower taxes would enable small business owners to hire more people, do more research, and expand operations. Simplifying taxes would free up time and resources for small firms to spend on business instead of on mind-numbing tax forms.

The estate tax also needs reform or elimination, as it imposes a huge burden on small businesses. Many small businesses must be sold just so heirs can pay taxes owed when a business owner dies. How does forcing heirs to sell a family business help family business?

These moves would do more to help small businesses than anything in the Innovation Agenda.

A Solution in Search of a Broadband Problem
Steven Titch ([email protected]) is senior fellow for IT and telecom policy for The Heartland Institute.

The Democrats’ recipe for a contrived “problem” in broadband growth is greater government interference, including expansion of existing subsidies and costly bureaucratic corporate welfare programs that do more to obstruct growth than encourage it.

There is no broadband problem in the United States. In the eight years that high-speed broadband technologies such as cable modems and DSL have been available to consumers, more than 60 percent of U.S. households have adopted broadband, making the adoption rate faster than cell phones and personal computers. What’s more, prices have dropped and competition has increased, to the point where most Americans can choose to purchase a variety of broadband service plans from cable, telephone, and wireless companies or unaffiliated Internet service providers.

While it is true all areas of the country do not have the same choices, the inherent demand for broadband is stimulating private investment in new technologies that can meet the needs of rural areas and inner cities economically. These include new wireless formats such as WiMax, satellite-based Internet, and broadband over power lines. Government subsidies, on the other hand, have the perverse effect of chasing away new investment, forcing taxpayers to foot the bill for older, expensive, less robust, and increasingly obsolete platforms derived from nineteenth and twentieth century telephone networks.

Although they give lip service to terms such as “effective targeting” and accountability, Democrats want to increase the very grants, loans, and giveaway programs that have proved to be ineffective boondoggles for years. The bloated federal Universal Service Fund grows bigger even as the number of Americans without phones falls to less than 1 percent of the population.

The Department of Agriculture’s Rural Utilities Service has available in 2007 $500 million for broadband grants and loans, supposedly for rural development. Yet if the past is any indication, these funds won’t end up in the hands of homeowners in sparsely populated rural counties, but in the hands of suburban real estate developers who, rather than turn to private equity markets, use taxpayer dollars to fund fiber build-outs to million-dollar McMansions in gated subdivisions.

Fortunately, broadband technology has been evolving faster than the government can create programs to “encourage” it. Let Congressional Democrats fuss away on all the broadband studies, surveys, reports, and coverage “maps” their “Innovation Agenda” calls for. The competitive market shows every sign of making broadband both cheap and universal long before their first finding on the broadband “crisis” will emerge.

Rehashing Failed Energy Proposals
James M. Taylor ([email protected]) is senior fellow for environment affairs at The Heartland Institute and managing editor of Environment & Climate News.

House Speaker Nancy Pelosi’s “Innovation Agenda” puts the term “innovation” in the looking glass, reversing it like a mirror. Pelosi advocates dumping tremendous amounts of taxpayer dollars into proposed energy technologies that have time and again proven to be failures.

Pelosi advocates taxpayer investment in ethanol, with an emphasis on cellulosic ethanol. Ethanol advocates have been touting cellulosic ethanol for years, yet nothing comes of it. The reason is not a lack of government support. Ethanol from all sources receives a 51 cent per gallon subsidy from the federal government already, plus benefits from numerous state subsidies and mandates, yet still is significantly more expensive than gasoline.

Because of current ethanol subsidies and mandates, farmland is being dedicated to energy production rather than food production. Not only are American consumers paying more for ethanol as a result of misguided government intervention, but they are paying more for their food due to the displacement of food crops in favor of ethanol.

New research from Iowa State University finds that diversion of farmland to ethanol production is costing the average family more than $100 per year in higher food costs. That cost will rise still further if Pelosi succeeds in coercing American farmers to grow less food.

Moreover, any asserted benefit of reducing foreign oil dependence is misleading. The two leading suppliers of U.S. oil imports are Canada and Mexico. Pelosi and the Democrats want Americans to pay substantially higher food and fuel prices merely to economically punish two of our closest allies.

On a Course for Energy Meltdown
Jim Eiden ([email protected]) is legislative specialist for environment and energy issues at The Heartland Institute.

Although innovation and lowering our dependency on fossil fuels are commendable goals, the current proposal by Congressional Democrats in Washington won’t achieve them, and will in fact make things worse than they are.

Average gas prices in the United States recently hit a record high of $3.07 per gallon, up 20 percent over two weeks. Rising prices at the pump cannot be attributed to the price per barrel of oil, which has been falling in recent weeks. The true culprit is not our dependence on foreign oil or the price per barrel, but rather the limited capacity of our domestic refineries.

In recent weeks there have been at least 12 partial shutdowns in the United States and internationally that have caused substantial cuts in our refining capacity. We simply do not have enough refineries to keep up with demand for gasoline. The refineries we do have barely keep the ship running, and when one or several shut down, it immediately sends the price at the pump through the roof.

The U.S. government has been unwilling to permit the construction of new refineries to keep up with demand for gasoline. At the same time, state and national government agencies mandate dozens of different gasoline blends for different areas of the country, making it impossible for the oil industry to pump enough of any one kind to keep the price stable.

In California, pollution control standards are more stringent than anywhere else in the U.S., so the fuel they put in their vehicles is more expensive and time-consuming to produce than fuel for, say, Alabama. Each time a new gasoline blend is created, processes must be reconfigured in ways that are time-consuming and costly. There are winters blends, summer blends, blends for the Midwest that have at least 15 percent ethanol added, and more.

If Pelosi is seeking “innovation,” she should try to cut down on the government requirements that increase the number of fuel blends manufactured each year. In addition, she should consider free-market policies that would encourage the development of more refineries.

The largest problem with the Democrats’ energy proposal is the premise that ethanol will help save us from dependency on foreign petroleum. Economists have shown that pushing corn-based ethanol will have negative impacts on the price of energy and food in the United States.

We cannot produce nearly enough ethanol to make us energy independent. In fact, a shift toward ethanol is expected to raise national consumption of fossil fuels by up to 2 percent annually. Ethanol production would also raise the price of corn and turn it away from use as food and feed, raising grocery prices. And ethanol subsidies would encourage farmers to farm land that was once set aside for conservation.

Studies suggest that while burning ethanol produces less CO2 than burning fossil fuels, ethanol produces more smog-causing pollutants. It is not cleaner than regular gasoline. Ethanol may appear, to the untrained eye, to cost less at the pump, but it reduces fuel economy–miles per gallon–substantially. All the studies suggest that ethanol at this time is a net energy loser.

If we increase subsidies to ethanol, as the Democrats propose, Americans will pay more for food, farmers will pay more to operate their farms, and taxpayers will pay for a fuel that is an energy loser.

The Democrats’ agenda puts the nation on a course for energy meltdown.

The Heartland Institute is a 23-year-old national nonprofit organization. Its mission is to discover, develop, and promote free-market solutions to social and economic problems.