On January 14, 2014, President Obama, speaking with his Cabinet, signaled his strategy for winning policy victories as Congress was convening for a new session. “One of the things I’ll be emphasizing in this meeting is the fact that we are not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help that they need.” Then he added:
I’ve got a pen and I’ve got a phone, and I can use that pen to sign executive orders and take executive actions and administrative actions that move the ball forward in helping to make sure our kids are getting the best education possible, making sure that our businesses are getting the kind of support and help they need to grow and advance, to make sure that people are getting the skills that they need to get those jobs that our businesses are creating. And I’ve got a phone that allows me to convene Americans from every walk of life—nonprofits, businesses, the private sector, universities—to try to bring more and more Americans together around what I think is a unifying theme, making sure that this is a country where if you work hard, you can make it.
In truth, the president was simply doubling down on his use of executive actions. On October 4, 2011, already frustrated with the pace of legislative progress after Republicans had taken over the House in January of that year, the president launched a series of executive actions under the moniker of “We Can’t Wait.” “Without a doubt, the most urgent challenge that we face right now is getting our economy to grow faster and to create more jobs. . . . We can’t wait for an increasingly dysfunctional Congress to do its job. Where they won’t act, I will,” he explained.
Historically, congressional gridlock has often motivated a president to grab the bully pulpit and consider going it alone. Despite protestations to the contrary—calls from some in Congress that President Obama is overstepping the bounds of office, or rewriting law—it is well within the president’s legal authority to issue executive orders, memoranda, directives, and other instructions to the departments and agencies that perform the functions of the federal government. Presidents from George Washington onward have done so, and in fact, some of the nation’s greatest moments have been marked by bold executive action—clearly the most memorable of which is the Emancipation Proclamation, issued by President Abraham Lincoln in 1863, at a time when our nation was much more divided than it currently is.
President Obama is not overusing his pen. If anything, he is making up for lost time. Perhaps what has sparked such a strong reaction is the president’s intentionality—the coordinated attempt to advance a more progressive agenda for the nation by using power that is outside the reach of a currently obstructionist Congress. The loud noise from certain quarters actually serves in some measure as a gauge of his success.
Taken as a whole, policies advanced by the Obama White House through executive actions are far ranging. Examples include sweeping immigration reform to better reflect American values, bold action on climate change, boosting wages for many hard-working Americans, helping students better manage student loan debt, enhancing retirement nest eggs, strengthening protections against workplace discrimination, holding education institutions more accountable, promoting greater equality by refusing to enforce the Defense of Marriage Act and prohibiting LGBT discrimination for employees of federal contractors, taking decisive action to open up travel to Cuba, and tackling education reform through No Child Left Behind Waivers and Race to the Top grants.
In additional to the more traditional rule making and appointments power, President Obama has deployed wide range of executive powers to advance his policy priorities, including:
- setting conditions on federal contracts and grants;
- issuing agency guidance as an enforcement tool, such as affirmative action guidance letters to educational institutions;
- fostering actions by independent federal agencies, such as on net neutrality;
- promoting private sector efforts such as Joining Forces (a collaboration with the nation’s military families and veteran organizations), the first lady’s Let’s Move initiative, helping youth find summer jobs, or the president’s Fatherhood project;
- tailoring law enforcement strategies, such as deferred immigration action for youth; and
- evoking inherent executive authority, such as opening up travel to Cuba.
Behind the scenes of the White House, these executive actions are tightly coordinated among the policy, press, and legal teams, and often involve highly choreographed rollouts to showcase the president’s ability to solve problems and deliver on promises.
No doubt, his successors in the White House will study his executive action playbook carefully, especially as the frustration with Congress wells up within the walls of the Oval Office. Policymaking through bold executive actions is the new normal in Washington, D.C.
In the end, however, the pen and the phone alone are insufficient to tackle the nation’s most urgent challenges, such as rapid climate change, expanding educational opportunity, income inequality, a lack of economic mobility, insufficient national investments in infrastructure, and boosting health and retirement security. To meet these challenges, we must also have decisive action by Congress, governors, and mayors.
For this report, The Century Foundation has reviewed the wide range of the Obama administration’s executive actions, and selected several examples that demonstrate the breadth of policy initiatives and strategies for accomplishing its goals. The report provides a brief summary of the executive action, its status and impact thus far, and a sampling of stakeholders' responses to the initiative. Although a number are still making their way through the regulatory process, or slowed by legal challenges, many—imbued with progressive values—are already leaving their mark on the country.
- Protecting Undocumented Immigrants from Deportation On November 20, 2014, President Barack Obama announced his Immigration Accountability Executive Actions, which would protect as many as 5 million undocumented immigrants from deportation and provide many of them with permits to work in the United States. This builds on the Deferred Action for Childhood Arrivals (DACA) executive action—which was announced in June 2012 and began accepting applications in August 2012—to cover people who entered the United States before their sixteenth birthday and who have lived continuously in the United States since January 1, 2010.
- Promoting Employment for Individuals with Disabilities On July 26, 2010, President Barack Obama signed Executive Order 13548: Increasing Federal Employment of Individuals with Disabilities.
- Protecting Wages for Home Care Workers On December 15, 2011, President Barack Obama announced at a press conference held jointly with Labor secretary Hilda Solis a proposed rule by the Department of Labor to update FLSA regulations, narrowing the companionship exemption in light of the modern home care industry.
- Promoting Pay Equality in the Federal Government/Private Contractors On May 10, 2013, President Barack Obama signed a presidential memorandum: Advancing Pay Equality in the Federal Government and Learning from Successful Practices. On April 8, 2014, President Obama signed an executive order prohibiting discrimination against employees of federal contractors who discuss or disclose wage information.
- Promoting a Minimum Wage for Federal Contractors On February 12, 2014, President Barack Obama signed Executive Order 13658: Establishing a Minimum Wage for Contractors.
- Making More Workers Eligible for Overtime Pay On March 13, 2014, President Barack Obama issued a presidential memorandum, Updating and Modernizing Overtime Regulations.
- Promoting a Culture of Workplace Flexibility On June 23, 2014, President Barack Obama signed a presidential memorandum: Enhancing Workplace Flexibilities and Work-Life Programs.
- Prohibiting LGBT Discrimination in Federal Contracts On July 21, 2014, President Barack Obama issued Executive Order 13672: Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity.
- Promoting Fair Pay and Safe Workplaces On July 31, 2014, President Barack Obama issued Executive Order 13673: Fair Pay and Safe Workplaces.
- Modernizing Family Leave Policy On January 15, 2015, President Barack Obama signed a presidential memorandum: Modernizing Federal Leave Policies for Childbirth, Adoption, and Foster Care to Recruit and Retain Talent and Improve Productivity.
Protecting Retirement Savings After several years of development, on April 20, 2015, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued a Notice of Proposed Rulemaking to revise conflict of interest rules for retirement investment advice, primarily by updating and broadening the regulatory definition of “fiduciary” under both ERISA and the IRC.
Streamlining and Standardizing NLRB Elections for the Modern Workplace In December 2014, the NLRB adopted final rules on election procedures by a three-to-two vote that split along party lines. The rules seek to “streamline Board procedures, increase transparency and uniformity across regions, eliminate or reduce unnecessary litigation, duplication and delay, and update the Board’s rules on documents and communications in light of modern communications technology.”
- Granting States Waivers for No Child Left Behind On August 8, 2011, Secretary Duncan announced that the federal government would allow states to apply for waivers to seek regulatory relief from NCLB’s more unpopular provisions, a move he had first mentioned in June. To qualify for waivers, states would have to adopt “college and career-ready” academic standards, outline plans to transform their lowest-performing schools, and establish new ways of measuring teacher and principal performance.
- Supporting Voluntary Use of Race to Achieve Diversity in Education On December 2, 2011, the Obama administration’s Department of Justice and Department of Education replaced the Bush administration guidance with two documents detailing the options available to educational institutions seeking to promote diversity yet remain in compliance with the three Supreme Court decisions, Grutter v. Bollinger, Gratz v. Bollinger, and PICS v. Seattle.
- Protecting Veterans against Fraudulent and Aggressive Higher Education Practices On April 27, 2012, President Barack Obama issued Executive Order 13607: Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members.
- Easing the Burden of Federal Student Loan Repayments To help students manage the burden of their higher education debt, President Barack Obama issued two presidential memoranda. On June 7, 2012, he issued Improving Repayment Options for Federal Student Loan Borrowers, and on June 9, 2014, he issued Helping Struggling Federal Student Loan Borrowers Manage Their Debt.
- Protecting International Development from Climate Change Risk On September 23, 2014, President Barack Obama issued Executive Order 13677: Climate-Resilient International Development.
- Reducing Global Carbon Emissions through Joint Agreements During a November 11, 2014 summit between President Barack Obama and President Xi Jinping of China, the two leaders made the U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation.
- Greening America’s Electricity Mix through the Clean Power Plan On June 2, 2014, the Environmental Protection Agency (EPA) issued its proposed rule, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan).
- Reducing Carbon Emissions by Improving Fuel Economy Standards On May 19, 2009, in order to lower emissions in the automobile sector, President Barack Obama announced the creation of a National Fuel Efficiency Policy, and directed the Environmental Protection Agency (EPA) and Department of Transportation to work with stakeholders from the states and private industry to develop a rule that would set more stringent national standards for emissions from the U.S. passenger automobile fleet.
- Reducing Federal Government Greenhouse Gas Emissions On March 19, 2015, President Barack Obama signed Executive Order 13693: Planning for Federal Sustainability in the Next Decade.
- Regulating Oil and Gas Fracking on Federal Lands On March 26, 2015, the Department of the Interior, Bureau of Land Management (BLM), issued a Final Rule: Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands.
Protecting the Waters of the United States On May 27, 2015, the EPA, in conjunction with the USACE, issued The Clean Water Rule: Definition of Waters of the United States (Final). The new rule ensures that “waters protected under the Clean Water Act are more precisely defined and predictably determined.”
- Restoring Diplomatic Relations with Cuba President Barack Obama—with prompting by the personal intervention of Pope Francis, who acted as a go-between for the United States and Cuba—announced on December 17, 2014, that he would begin a process toward the normalization of relations with Cuba.
Access to the Information Economy
- Promoting Net Neutrality On November 10, 2014, President Barack Obama publicly asked the FCC to reclassify consumer broadband services under Title II of the Communications Act, allowing the agency to regulate broadband as a common carrier.
There are approximately 11 million undocumented immigrants living in the United States, or roughly 3.5 percent of the population. Nearly half of the country’s undocumented individuals have children who are minors, many of whom were born in the United States.
Since President Barack Obama took office, an estimated 2 million immigrants have been deported. In 2012, 47 percent of those deported for committing crimes were convicted of only immigration or traffic offenses. Between 2010 and 2012, 205,000 parents of children who are U.S. citizens were deported. In 2011, at least 5,100 citizen children of undocumented immigrants were living in foster care because their parents had been deported or detained.
The nation’s record levels of deportation are doing very little to solve our immigration crisis, yet many deportations undermine families, foster fear in immigrant communities, and cost taxpayers millions of dollars per year. Political leaders in both parties have long agreed that our immigration system is broken, but Congress has consistently failed to pass comprehensive reform.
On November 20, 2014, President Barack Obama announced his Immigration Accountability Executive Actions, which would protect as many as 5 million undocumented immigrants from deportation and provide many of them with permits to work in the United States. This builds on the Deferred Action for Childhood Arrivals (DACA) executive action—which was announced in June 2012 and began accepting applications in August 2012—to cover people who entered the United States before their sixteenth birthday and who have have lived continuously in the United States since January 1, 2010.
What It Does
The president’s sweeping actions rely primarily on what is called “prosecutorial discretion”; that is, the power of the executive to decide whether—and to what degree—to enforce the law. As a November 19, 2014 memo from the Department of Justice Office of Legal Counsel affirms, it is permissible for the Department of Homeland security to “prioritize the removal” of certain categories of undocumented immigrants, especially given the department’s limited resources and therefore the infeasibility of deporting all people unlawfully residing in the United States. The executive’s discretionary authority regarding immigration enforcement is well established in the courts and has been employed by Presidents Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush.
The president undertook the following under his prosecutorial discretion authority:
- Expand the existing Deferred Action for Childhood Arrivals (DACA) program—which was announced in June 2012 and began accepting applications in August 2012—to cover people who entered the United States before their sixteenth birthday and who have have lived continuously in the United States since January 1, 2010. People who were “aged out” of DACA under the old rules (because they were older than age 31 on June 15, 2012) can now apply. Approximately 300,000 people will be benefit from these changes—that is in addition to the approximately 1.2 million who already qualified for DACA.
- Establish the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, which allows undocumented people who have lived in the United States continuously since January 1, 2010, and whose son or daughter is a citizen or lawful permanent resident to apply for protection from deportation and work authorization for three years. An estimated 4.1 million people will qualify for this program.
The president also undertook the following under his regulatory authority:
- Expanding the Provisional Waiver Program to allow the spouses and children of lawful permanent residents and the adult children of U.S. citizens and lawful permanent residents to apply. The waivers, which were hitherto available only to spouses and children of U.S. citizens, allow people to avoid long stays abroad or trouble with reentry during the process of applying for green cards.
The president’s batch of actions also included measures to:
- Strengthen border security. An elaboration of the Southern Border and Approaches Campaign, first announced in May.
- Revise removal priorities. Implementation of new DHS-wide policy prioritizing removal of national security threats, felons, gang members, and illegal entrants apprehended at the border.
- End Secure Communities and replace it with the Priority Enforcement Program. The new program will still allow ICE to examine fingerprint records maintained by local police and prisons, but they will have to specify that the person in question has a removal order against them or is likely deportable.
- Reform ICE Officer pay and work classification. Intended to bring ICE agents and officers pay in line with other law enforcement personnel.
- Revise immigration parole rules for talented entrepreneurs.
- Enable U.S. businesses to hire and retain highly skilled foreign-born workers.
On February 16, 2015, Judge Andrew S. Hanen of Federal District Court of the Southern District of Texas ruled in favor of Texas and twenty-five other states seeking injunctive relief to prevent them from having to implement the president’s deferred deportation programs. Judge Hanen did not rule on the constitutionality of President Obama’s executive actions, but decided there was sufficient merit to the states’ case to warrant a suspension of the programs while the case proceeds through the courts. U.S. Citizenship and Immigration Services (USCIS) had been set to begin accepting applications for the expanded DAPA/DACA program on February 18, 2015.
The Department of Justice immediately appealed Hanen’s decision and filed a motion to stay his ruling. Hanen rejected the federal government’s timeline, so on March 12, 2015, the department filed for an emergency stay in the Court of Appeals for the Fifth Circuit of New Orleans. If the appeals court grants the stay, the deferment programs could move forward while their constitutionality is adjudicated by the courts.
As of June 2014, the DACA program had already provided relief from deportation to 581,000 young immigrants.
If allowed to proceed by the courts, the White House estimates that the Immigration Accountability Executive Actions would make deportation relief available to some 5 million undocumented immigrants—parents and children—under DACA and DAPA.
The White House Council of Economic Advisors (CEA) anticipates substantial economic gains as a result of the executive actions, including:
- Between 0.4 percent ($90 billion) and 0.9 percent ($210 billion) increases in GDP over the next ten years.
- Decrease in federal deficits by $25 billion to $60 billion over the next ten years.
The CEA anticipates no negative impact on employment among U.S.-born workers, as the “the additional demand associated with the expanded economy would offset the additional supply of workers.”
The Center for American Progress estimates an increase in payroll tax revenues of $2.9 billion in the first year, and $21.2 billion over five years, as well as an average wage increase of 8.5 percent over one year for undocumented immigrants eligible for new and expanded deferred action.
Pro-Immigrant groups have applauded the order:
- Labor unions—including the AFL-CIO, Service Employees International Union (SEIU), United Auto Workers (UAW), and Communications Workers of America (CWA)—applauded the president taking a major step toward fixing the broken immigration system and defending undocumented workers from abuse by employers who would exploit their precarious status.
- U.S. Catholic Bishops praised the action for “protect[ing] people who need to come out of the shadows.”
On December 29, 2014, an amicus brief by the following immigration, civil rights, and labor groups was filed in State of Texas v. United States defending the president’s actions:
- Service Employees International Union
- Counsel for American Immigration Council
- American Immigration Lawyers Association
- Define American
- National Immigrant Justice Center
- National Immigration Law Center
- Southern Poverty Law Center
- United We Dream
An amicus brief was also filed by fourteen states, joining the Department of Justice in calling on the appeals court to lift the injunction imposed by Judge Hanen. Furthermore, a group of 136 legal scholars who reviewed the president’s legal rationale have affirmed that the immigration actions are within the legal authority of the executive branch.
The executive actions are not without their critics, however. Republican leaders have charged that President Obama overstepped the authority of the presidency, ignoring the will of the people, and undermining efforts to forge a permanent solution using legislation. And twenty-six states with conservative leadership have joined a lawsuit charging that the costs of supporting undocumented immigration would cause them irreparable harm.
In 1990, President George H. W. Bush signed the Americans with Disabilities Act, which prohibits discrimination against individuals with disabilities in the workplace, as long as it does not cause undue hardship for the employer. However, a decade later, due to evidence that qualified persons with disabilities were still being refused employment, President Bill Clinton signed Executive Order 13163, calling for an additional one hundred thousand individuals with disabilities to be employed by the federal government over the following five years.
Unfortunately, few steps were taken to implement that order, and in 2010, individuals with disabilities represent less than 5 percent of the 2.5 million people in the federal workforce, even though they represent 19 percent of the overall population. Nationwide, the unemployment rate of people with disabilities in 2010 was 14.8 percent, while the unemployment rate overall was 9.4 percent.
On July 26, 2010, President Barack Obama signed Executive Order 13548: Increasing Federal Employment of Individuals with Disabilities.
What It Does
Executive Order 13548 calls for the achievement of the same hiring goals set by President Clinton’s Executive Order 13163, which sought over a five-year period 100,000 new hires of individuals with disabilities and targeted disabilities to work in the federal government. To achieve this goal, the order requires the following actions regarding recruitment and hiring:
- The Office of Personnel Management (OPM) will design model recruitment and hiring strategies for agencies for individuals with disabilities.
- Each federal agency will develop an agency-specific plan for promoting employment opportunities for individuals with disabilities.
- Each federal agency will designate a senior-level official as the point person to be accountable for developing and implementing their agency’s plan.
- Each federal agency will increase participation of individuals with disabilities in internships, fellowships, and training and mentoring programs.
- The OPM will implement a system for reporting regularly to the president, heads of agencies, and the public on their progress in completing the objectives of this order.
The order also requires the following actions related to increasing retention and return to work:
- The OPM will identify and assist federal agencies in implementing the best strategies for retaining workers with disabilities as well as expanding return-to-work outcomes for those who are injured on the job.
- Federal agencies will make special efforts to ensure the retention of those who are injured on the job.
The order is currently in its last year of rollout.
The OPM’s most recent annual report has shown some progress. Since fiscal year 2011—the first year for which the order was in effect—the federal government has hired 51,352 full-time permanent employees with disabilities, making the current total 234,395 people. More than 18 percent of new hires in fiscal year 2013 were individuals with disabilities, the highest rate since 1981. However, a report by GAO in 2012 stated that the federal government was not on track to fulfill the requirements of the order, and made multiple recommendations to expedite the process, such as more comprehensive briefings for the president, especially regarding deficiencies in federal agency plans.
Nationwide, the unemployment rate for persons with disabilities was 13.3 percent in 2013, almost double the rate for those with no disability (7.1 percent). Additionally, 34 percent of workers with a disability were employed part time, compared to 19 percent of those with no disability.
- Elaine E. Katz, senior vice president of grants and communications for the Kessler Foundation, praised the order, stating that it was “the most comprehensive effort by the federal government to stimulate employment for people with disabilities.” However, she notes that there is still much to be done to fully integrate individuals with disabilities into the workplace.
The 1.9 million home care aides in the United States are among the nation’s most poorly paid workers, earning an average hourly wage of $10.30, which amounts to $3,000 less annually than a family of four needs to stay even with the poverty level. This is not entirely by happenstance. Unlike virtually all other workers, home care aides are generally not entitled to the minimum wage and overtime protections guaranteed by the Fair Labor Standards Act (FLSA)—the consequence of regulations that have not been updated since the 1970s.
In 1974, Congress extended FLSA protections to all “domestic service” workers, the broad category of household employees to which home care aides belong. (Previously, the rights to the minimum wage and time-and-a-half pay for weekly work in excess of forty hours did not apply to domestic service workers employed by private individuals or small firms.) However, Congress concurrently created a “companionship” exemption, subsequently codified in Department of Labor regulations issued in 1975, that precluded workers primarily providing fellowship (that is, socialization) and protection (that is, supervision) from receiving the FLSA guarantees.
The companionship exemption, and another like it excluding “live-in” workers from overtime protections, applied to third-party employers as well, which meant home care providers were not required to pay staff minimum wages or overtime if they met the regulatory exception. Although the exemption was intended to cover “elder sitters” serving as the functional equivalent of babysitters for older adults or those with illnesses, injuries, or disabilities, its effect in the intervening years has been to suppress the earnings of nearly all home care workers, as courts have interpreted the companionship provision broadly. Nearly all of these slighted workers are women (92 percent), and a substantial share are racial minorities (nearly 50 percent)—two groups that have historically faced labor market discrimination. In part as a result of their wages, two-in-five home care workers depend on public benefits, such as food stamps, to make ends meet.
Against this sweeping and static regulatory backdrop, the home care industry has undergone a profound transformation during the past four decades. Escalating nursing home costs, together with medical advances and a cultural backlash against institutionalization, have led to a rapid expansion of community-based care for the elderly and disabled. The number of Medicare-certified home health agencies increased nearly ten-fold between 1967 and 2009, to 10,600. Similarly, the home care workforce tripled between 1988 and 1998, and then doubled again by 2008. As of 2013, some 12 million Americans could not live independently due to age or disability; four out of five of them receive the long term services and supports they require in community settings.
According to the Congressional Budget Office, Americans spent $58 billion on community-based care in 2011, while also generating four times that ($234 billion) through care provided through informal arrangements, such as adult children caring for their parents. Industry estimates of home care spending are even higher, to the tune of $72 billion as of 2009. And defined most broadly, as consisting of two BLS-designated industries, Home Health Care Services (HHCS) and Services for the Elderly and Persons with Disability (SEPD), the home care sector consists of some 89,400 establishments with $90.8 billion in revenue as of 2011. Medicare and Medicaid account for about half the expenditures, with state and local governments financing another 20 percent and private insurance picking up 12 percent. Out-of-pocket spending accounts for just a tenth of industry revenues.
To meet this growing demand for increasingly sophisticated in-home services, the domestic service workforce has professionalized considerably. Indeed, “home care” is a broad label encompassing several related occupations, including home health aides, personal care aides, certified nursing assistants, caregivers, and others whose distinctions are not always clearly drawn. What is clear, though, is that many such practitioners require advanced skills and training. As a result, the modern home care professional bears little resemblance to the companions Congress envisioned in 1974.
The trend toward professional in-home care is only expected to intensify in the years ahead as the population ages. By 2050, there will be 84 million Americans age 65 years and older, double the number today. Two-thirds of them will require assistance conducting daily activities at some point in their lives; at any given time. about a quarter of older Americans living in the community experience functional limitations.
The home care industry is expected to expand commensurately, with the number of home care practitioners increasing by 49 percent (to 3.1 million) by 2022. To put this in context: the two occupations that comprise most home care jobs, personal care aide and home health aide, are the first- and fourth-fastest growing professions, respectively, according to the Bureau of Labor Statistics. By 2050, demand for services will require as many as 6.6 million home care professionals.
A note on terminology: labels for both home care workers and the industry as a whole are subject to a wide degree of definitional imprecision. Several related terms are regularly employed interchangeably to describe the industry and its workforce. “Home care,” “in-home services and supports,” and “long term services and supports” are the most generic labels. Both home health aides and personal care aides assist clients with activities of daily living (eating, bathing, dressing) and instrumental activities of daily living (cooking, shopping, managing money), but the former, who typically work for certified home health agencies, may also provide basic medical care, subject to strict regulations and under the supervision of medical professionals such as registered nurses.
On December 15, 2011, President Barack Obama announced at a press conference held jointly with Labor secretary Hilda Solis a proposed rule by the Department of Labor to update FLSA regulations, narrowing the companionship exemption in light of the modern home care industry.
The home care initiative was part of the president’s larger “We Can’t Wait” campaign, which, through a series of executive actions in 2011 and 2012, aimed to stimulate job growth in the absence of congressional action. Like many of the “We Can’t Wait” measures, the home care initiative was not accompanied by a formal executive order.
The Department of Labor issued a notice of proposed rulemaking on December 27, 2011, and twice extended the comment period, through March 2012. The final rule, formally titled “Application of the Fair Labor Standards Act to Domestic Service,” was published in the Federal Register on October 1, 2013, with an effective date of January 1, 2015.
What It Does
The final rule makes three important changes to the regulations regarding the application of the FLSA (29 USC Chapter 8) to domestic service (29 CFR Chapter V, Part 552). Together, these revisions clarify and narrow the companionship services and live-in exemptions, affording home care workers minimum wage and overtime protections under the FLSA, in accordance with the professionalization of the industry and the skilled duties they are primarily required to perform.
- Redefining companionship. Companionship is defined to be “the provision of fellowship and protection for an elderly person or a person with illness, injury, or disability who requires assistance in caring for himself or herself.”
- In turn, fellowship refers to engaging in social, physical, and mental activities, which include things like conversation, games, exercise, errands, or social events. Protection refers to monitoring an individual’s safety and well-being.
- Companionship services can include the “provision of care” (i.e., the core work of home care aides, such as assistance with ADLs and IADLs) if such care does not account for more than 20 percent of an employee’s workweek.
- In addition, companionship services do not include housework performed primarily for other household members, nor does it include medical services.
- Taken together, the components of this definition of companionship limit the scope of the companionship exemption considerably, making explicit that work that primarily involves care (assistance with ADLs and IADLs) or medical services cannot be exempted from FLSA protections.
- Eliminating exemptions for third-party employers. Third-party employers, such as home health agencies, can no longer claim the companionship or live-in domestic service exemptions for employees engaged in these activities (even when the employee is jointly employed by the household receiving services).
- Thus, companionship and live-in domestic service employees of third-party employers are entitled to both minimum wage and overtime protections. However, private household employers may still claim all applicable exemptions.
- Recordkeeping for live-in domestic service employees. Employers of live-in domestic servants must keep records of exact hours worked (previously, the terms of the employment agreement would suffice).
The effective date of the new regulations was set fourteen months after the publication of the final rule, so as to give the industry and consumers adequate time to adapt. However, this schedule was deemed by some as too aggressive, and concerns from states and other involved parties led the Department of Labor, in October 2014, to announce a non-enforcement policy until July 1, 2015. In addition, during the following six months, the department would exercise prosecutorial discretion in deciding whether those targeted with enforcement actions made good faith efforts to comply with the law.
In the meantime, industry groups challenged the new rules in federal court. On December 22, 2014, in Home Care Association of America v. Weil, District Court Judge Richard Leon vacated the new rule prohibiting third-party employers from claiming FLSA exemptions. Then, on January 14, 2015, after a temporary two-week stay of the new rules, he struck down the entirety of the extension of minimum wage and overtime protections to home care workers, on grounds that a change in the definition of companionship services required legislative action.
The Department of Labor filed an expedited appeal, which was granted by the Court of Appeals for the D.C. Circuit two weeks later. The case will be fully submitted in May 2015.
The main effect of applying FLSA protections to home care workers is to transfer income from employers to employees. During the next ten years, the Department of Labor projects that home care workers will receive an additional $322 million annually in wages, mostly due to overtime pay ($218 million) and compensation for travel time ($104 million). The majority of this transfer will come from provider profits, though part of it is expected to be passed on to consumers (and insurers) in the form of higher prices for services. The extension of minimum wage protections is expected to have no impact, since nearly all home care workers already receive more than the minimum wage. Twenty-one states already extend minimum wage rights to home care workers; fifteen of these also offer overtime guarantees.
In addition to the transfers, the new regulations will create economic costs and benefits.
Third-party and household employers will, on a yearly basis, incur $6.8 million in additional costs associated with familiarizing themselves with the new regulations, hiring extra workers (so as to avoid overtime pay). Deadweight loss (allocative inefficiencies resulting from consumers and employers paying more for services than they would in the absence of regulations) is expected to be minimal, as the demand for home care services tends to be relatively unresponsive to modest price increases. This allocative inefficiency will result in the loss of about 1,100 jobs—a tiny fraction of the home care workforce.
The new wage protections are expected to reduce worker turnover and associated recruitment and training costs, to the tune of $24 million annually. Better paid workers are also likely to perform better on the job, improving service delivery. Thus, on balance, the Department of Labor projects a net societal benefit of the new regulations of $17 million annually over the next decade.
The new regulations have generated significant attention, with passionate interests organized on both sides of the debate.
Workers’ rights advocacy groups, unsurprisingly, are strongly in support of FLSA protections for home care workers, as are those concerned with consumer well-being and home care services. Among the most prominent supporters are the Paraprofessional Healthcare Institute (PHI), Caring Across Generations, the SEIU, the AFL-CIO, the ACLU, AARP,and the National Employment Law Project. Also in support are fifty Democratic members of Congress and the State Attorney Generals of New York, Illinois, Massachusetts, and New Mexico.
Equally unsurprisingly, the new regulations are vehemently opposed by industry groups, including the Home Care Association of America, the International Franchise Association, and the National Association from Home Care and Hospice.
In 1963, President John F. Kennedy signed the Equal Pay Act, which abolished wage disparity based on gender. The initiative was one badly needed, since at the time women made on average 59 cents for every dollar paid to their male counterparts. More recently, President Barack Obama signed the Lilly Ledbetter Fair Pay Act in 2009, which shored up the original law by explicitly enabling individuals to challenge continuing pay discrimination, not just an employer’s original discriminatory pay decision.
Although gains have been made over the past fifty years, the wage disparity is far from gone—as of 2014, women make 78 cents for every male dollar. Breaking the numbers down by race, the gap widens to 64 cents for African American women and 56 cents for Latina women. This results in each working woman in the country on average foregoing $431,000 in wages over her career. Women comprise of 47 percent of the total U.S. workforce, yet they remain significantly underrepresented in the highest-paying fields, such as engineering and computer occupations.
On May 10, 2013, President Barack Obama signed a presidential memorandum: Advancing Pay Equality in the Federal Government and Learning from Successful Practices. On April 8, 2014, President Obama signed Executive Order 11246: Non-Retaliation for Disclosure of Compensation Information.
What It Does
In order to promote gender pay equality in the federal government and to evaluate how current internal practices affect compensation of similarly situated men and women, the memorandum directs the Office of Personnel Management (OPM) to submit a Governmentwide Strategy for Advancing Pay Equality. Such a strategy is to include:
- analysis of whether changes to the General Schedule classification system would assist in addressing any gender pay gap,
- proposed guidance to agencies to promote greater transparency regarding starting salaries, and
- recommendations for additional administrative or legislative actions or studies that should be undertaken to narrow any gender pay gap.
Additionally, to facilitate this, agencies will provide to the OPM information on:
- all agency-specific policies and practices for setting starting salaries for new employees,
- all agency-specific policies and practices that may affect the salaries of individuals who are returning to the workplace after having taken extended time off from their careers (for example, those who served as full-time caregivers to children or other family members),
- all agency-specific policies and practices for evaluating individuals regarding promotions, particularly individuals who work part-time schedules (for example, those who serve as caregivers to children or other family members),
- any additional agency-specific policies or practices that may be affecting gender pay equality, and
- any best practices the agency has employed to improve gender pay equality.
Executive Order 11246 prohibits federal contractors from discriminating against any employee who discusses or discloses the compensation of any employee.
The OPM released its report detailing its Governmentwide Strategy on Advancing Pay Equality on April 11, 2014. It found that the federal gender pay gap had shrunk from 30 percent to 13 percent between 1992 and 2012, meaning that women in the federal government made 87 cents to every male dollar in 2012. In order to continue progress, the report makes recommendations for further administrative actions, legislative actions, and studies that can help reduce the disparity. On September 17, 2014, the Office of Federal Contract Compliance Programs (OFCCP) issued proposed regulations to implement the executive order.
This memorandum could potentially benefit 899,160 women employed in executive agencies in the federal government. Executive Order 11246 will make salary disparities more transparent, increasing the chance they will be remediated.
While the memorandum received significant positive support, much of it was qualified in nature:
- Janet Kopenhaver, Washington representative of Federally Employed Women (FEW), stated, “We’re glad to see the initiative that the president put forward,” and emphasized the importance of the OPM study to understand the reasons behind the federal pay gap. However, she also stated that FEW is concerned about the inability of women to be adequately represented at senior levels and more must be done.
- J. David Cox Sr., national president of the American Federation of Government Employees (AFGE), stated, “It is all well and good that the President takes pay equity seriously, and so do we. But President Obama needs to focus on pay adequacy for every federal employee. After three straight years of pay freezes, he needs to focus on raising pay for all federal workers.”
- The National Women’s Law Center (NWLC) referenced the memorandum in their Equal Pay Report as a positive step the federal government has made to strengthen equal pay laws. However, the report also makes clear that pay equity requires more legislative action, such as the Paycheck Fairness Act.
The federal minimum wage, last set at $7.25 an hour in 2009, is not indexed to inflation. Absent legislative action, its real value erodes over time, undermining the living standards of the 19 million Americans who are compensated at this level. Today, the minimum wage is worth a third less than its 1968 peak ($10.53 an hour in 2015 dollars).
On February 12, 2014, President Barack Obama signed Executive Order 13658: Establishing a Minimum Wage for Contractors.
What It Does
The order raises the minimum wage for federal contractors to $10.10 an hour, beginning January 1, 2015, and indexes it to inflation for subsequent years. (For tipped workers, the 2015 increase was from $2.13 to $4.90.)
Federal agencies are now required to include a new clause in all covered contracts specifying the minimum wage to be paid under the order. They are also directed to withhold payments in the event of contractor violations. Contractors are required to include the minimum wage clause in any subcontracts and notify all employees of their wage rights.
Four categories of contracts are covered by the order:
- Construction contracts under the Davis-Bacon Act (DBA). The DBA applies to contracts $2,000 or greater that involve the construction, alteration, or repair of public buildings or public works. The order applies specifically to procurement contracts.
- Service contracts under the Service Contract Act (SCA). The SCA requires service contractors with contracts greater than $2,500 to pay prevailing wages.
- Concessions contracts. This class of contracts includes services such as food, souvenirs, or recreation that are provided on federal property.
- Contracts which grant the right to use federal property to provide services. Similar to concessions contracts, these involve situations where businesses lease government space to furnish services to federal employees or the public. Example are coffee shops and child care.
Workers covered by the order include: (a) employees protected by the federal minimum wage under the Fair Labor Standards Act; (b) employees guaranteed prevailing wages under either the DBA or the SCA. In cases where workers are legally entitled to a wage rate higher than the executive order rate, the higher rate prevails. The order, and the related regulations, are also carefully written to avoid adverse conflicts with existing law.
Several types of contractual agreements are exempt from the order, including grants, contracts with Indian Tribes, construction procurement contracts not covered by the DBA, service contracts exempt from the SBA (for example, public utilities), and contracts with individuals.
Although the wage increase is designed to improve the well-being of low-wage workers, it was also justified on efficiency grounds. It is well documented in the economics literature that better paid workers are happier and work harder, boosting productivity. Such workers are also less prone to change jobs, miss work, or shirk, reducing recruitment, training, and supervisory costs.
By raising the wages of government contractors, the Obama administration hopes to improve vendor performance and the effectiveness of the procurement process.
In response to the order, the Department of Labor published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on June 17, 2014. After reviewing the many comments submitted by interested parties, the Department of Labor issued a Final Rule on October 1, 2014. The new rule took effect January 1, 2015.
The order applies only to solicitations issued (or contracts otherwise awarded) after January 1, 2015. Existing contracts are unaffected, which means that the impact will be gradual.
The direct impact of the order will be modest. Although the federal government holds many contracts, the minimum wage workers covered by these contracts are a small fraction of the national minimum wage population. At full implementation, the Department of Labor anticipates the order will raise the wages of about 200,000 people (183,814 to be exact), who currently make an average of $8.79 per hour for 2,080 annual hours of work. However, the ramp up will be gradual, as the order applies only to new contracts. The Department of Labor estimates that 20 percent of contracts turn over each year, which means that most contracts will be covered by 2019. Consequently, the projected cost of the order will be $100.2 million in 2015, and rise to $501 million by 2019.
However, there is reason to believe the indirect impact will be larger. The order, along with the administration’s broader call for raising the national minimum wage, has brought attention to the issue and helped to build pressure for higher wages. Since the president’s initial proposal for a minimum wage increase in 2013, thirteen states and the District of Columbia have raised their minimum wage, impacting an estimated 7 million workers by 2017. Cities have also taken notice, with Seattle, Philadelphia, St. Louis, Louisville, and others raising local wages. The private sector has joined the movement as well, with Gap, Disney, IKEA, and, most recently, Wal-Mart increasing minimum pay levels.
There has been expected hostility from business groups and conservatives, who contend that higher minimum wages destroy jobs and hurt growth.
Comments submitted to the Department of Labor by the National Restaurant Association and the International Franchise Association contend that the new rule puts restaurants operating on federal premises at a competitive disadvantage with those located on nearby private properties, which they warn could lead to layoffs, pay cuts among other employees, and outright closures of establishments.
Similarly, comments issued jointly by the National Federation of Independent Businesses (NFIB) and the U.S. Chamber of Commerce characterize the rule as overly broad, affecting businesses beyond those which would traditionally be considered federal contractors, as well as lacking in clarity, thus causing confusion in compliance. They also argue that administration failed to provide adequate evidence that the rule would achieve “economy and efficiency.”
Virtually all opponents of the rule, which also include the HR Policy Association and the Associated Builders and Contractors, Inc., take the position that the administration overstepped its statutory authority in raising the minimum wage for contractors.
Equally unsurprisingly, labor advocates, including the AFL-CIO, the National Women’s Law Center, Interfaith Worker Justice, Demos, and the National Employment Law Project, among others, have supported the administration’s action. Many supporters, such as Demos, assert that not only is the rule “reasonable and appropriate,” but also that it will have “additional public benefits” beyond those described by the Department of Labor, and will affect more workers—perhaps 350,000. Similarly, NELP noted that the actual cost to contractors would be less that the administration estimated.
However, progressives have also voiced concerns, urging the administration to push for more sweeping action, including expanding other workplace protections, such as paid leave and guaranteed hours.
Under the Fair Labor Standards Act (FLSA), employees who work more than forty hours per week are entitled to pay at 1.5 times their usual rate. However, the law has numerous exceptions, the most prominent of which is the white-collar exemption that excludes “bona fide executive, administrative, and professional employees” from the overtime guarantee (the exclusion also applies to computer and outsides sales workers). While exempting well-compensated managers from overtime rules is consistent with the law’s intent—protecting workers at risk for exploitative work schedules—the regulations have not kept pace with the accelerating white-collarization of the American workforce, leaving increasing numbers of workers vulnerable to abuse.
Traditionally, the “duties-based” standard for overtime protections has been supplemented with an earnings standard, so as to avoid misclassifying low-wage and hourly workers with job descriptions that do not reflect the degree of discretion they exert over their work schedules. However, the earnings threshold, which is set administratively by the secretary of labor, is not indexed to inflation and has been updated only eight times since the FLSA was passed in 1938, and most recently set at $455 per week in 2004. This salary is equivalent to $23,660 annually, which is less than the poverty guideline for a family of four ($24,250). It is also well below the $250 per week standard set in 1975 (the last update prior to 2004), which is worth $56,500 in today’s dollars. As a result, the share of salaried workers with guaranteed overtime protections has declined, from two-thirds of the workforce in 1975 to less than one-tenth today. Together, with the shift toward white-collar work, the erosion of the earnings standard means a substantial share of the U.S. labor force is at risk for being forced to work unreasonable hours.
On March 13, 2014, President Barack Obama issued a presidential memorandum, Updating and Modernizing Overtime Regulations.
What It Does
President Obama’s memorandum instructs the secretary of labor to modernize and streamline the FLSA overtime regulations, subject to three primary criteria:
- remain consistent with the FLSA’s intent;
- reflect the evolution of the American workplace; and
- simplify the regulations to make them easier for employees and employers to understand.
A full year after the president’s memorandum, the Department of Labor has not yet issued a proposed rule. In the Department of Labor’s May 2014 Semi-Annual Regulatory Agenda, it projected November 2014 as the release date for a proposed rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees.” However, its November 2014 Regulatory Plan delayed the projected publication date of the proposed rule to February 2015. The proposed rule is expected to be published in May.
Upon publication of the proposed rule, there will be a thirty-day public comment period. The Department of Labor will then respond to comments and draft a final rule. The Office of Management and Budget’s Office of Information and Regulatory Affairs has ninety days (with a possible thirty-day extension) to review the draft final rule and publish the approved regulation in the Federal Register.
Because approximately 90 percent of America’s 65 million salaried workers earn more than the overtime threshold—and a substantial share of these work in white-collar occupations—the revised regulations have the potential to benefit millions of workers. While it is unclear how many workers’ overtime rights are currently being violated (partly because the complexities of existing regulations are confusing to employees and employers alike), it is likely that a higher earnings standard coupled with clearer exceptions will improve compliance rates. In fiscal year 2014, the Department of Labor took enforcement action against 11,238 overtime violation cases and collected $136 million in back pay.
As would be expected, workers and labor groups are strongly in support of the Obama administration’s overtime actions, while business interests are opposed, given potential cost implications. Among the progressive policy organizations that have supported the president’s proposal are the Economic Policy Institute and the Center for American Progress. Opponents include the Cato Institute and the National Retail Federation.
The balance between family life and work life has shifted over the past half-century, with more women now in the workforce and many households comprised of dual-earners couples. But workplace flexibilities to accommodate the dynamics of these changes have not kept up.
In 1950, 34 percent of women participated in the labor force—by 2010, 59 percent of women overall, and 71 percent of women with children were working. But while mothers today are working more, they still spend the same number of weekday hours with their children as they did in 1977, and still do the majority of the cooking, cleaning, and other household chores. Additionally, the average workday time of fathers has increased significantly, precisely at a time when some fathers are doing more household chores and spending more time with their children. As a result, 49 percent of employed men with families have reported experiencing some or a lot of work-family conflict.
According to this 2009 Talent Management Study, in the private sector, only 31 percent of employers felt their organization had established flexible options for employees to a moderate/great extent. In the manufacturing sector, only 18 percent of organizations felt they had established these options. Currently, laws that guarantee workers a right to request flexible work arrangements have been passed in Vermont and the city of San Francisco.
Employers are under increasing pressure to establish workplace flexibility, such as flexibility in scheduling full-time hours, flexibility in number of hours worked and location of work, career flexibility, and flexibility to address unexpected and ongoing personal and family needs.
On June 23, 2014, President Barack Obama signed a presidential memorandum: Enhancing Workplace Flexibilities and Work-Life Program.
What It Does
The presidential memorandum requests that the federal government, as the nation’s largest employer, lead by example and revisit and enhance its policies on workplace flexibilities through the following initiatives:
- Establishing the right to request work schedule flexibilities. Federal agencies will ensure that employees understand and are aware of their right to request work schedule flexibilities available to them under law without fear of retaliation or adverse employment action as a consequence of making such a request. Supervisors must consider the request and respond within twenty business days.
- Expanding access to workplace flexibilities. Agency heads will ensure that flexibilities, such as part-time employment, alternative work schedules, telework, sick leave, and so on, are available to the maximum extent possible.
- Expanding and encouraging use of work-life programs. Agency heads are encouraged to increase the availability and use of work-life programs such as on-site child care, child care subsidies, counseling, support for nursing mothers, and so on.
- Helping agencies encourage the use of workplace flexibilities and work-life programs. The director of the federal Office of Personnel Management (OPM) shall work with agencies to provide appropriate education, guidance, and support to all agency employees on use of and promotion of workplace flexibilities and work-life programs. The OPM will also create and annually update a Workplace Flexibility Index in order to monitor progress over time.
- Establish agency review of workplace flexibilities and work-life programs. Each agency will review its workplace policies and issue a report with best practices and any barriers or limitations that may unnecessarily restrict workplace flexibilities and work-life programs.
On August 22, 2014, Katherine Archuleta, director of OPM, released a memo with guidance for implementing the presidential memorandum to the heads of executive departments and agencies. The memo contained the following attachments:
This memorandum, which applies to executive agencies, extends the benefits to up to 2,067,262 federal employees.
- David Cox Sr., president of the American Federation of Government Employees (AFGE), praised the memorandum, saying that some of their members have faced resistance to the implementation of flexible work schedules, especially when it comes to telework.
Only nineteen states and the District of Columbia have laws explicitly protecting lesbian, gay, bisexual, or transgender (LGBT) workers from employment discrimination. Although the business community has made great strides toward eliminating LGBT discrimination—most Fortune 500 companies, many small businesses, and the top five federal contractors already prohibit discrimination based on sexual orientation and gender identity—the absence of federal level legislation leaves many millions of Americans vulnerable to discriminatory treatment by their employers.
In November 2013, the Senate passed the Employment Non-Discrimination Act (ENDA)—which would prohibit LGBT discrimination in the workplace—with bipartisan support, but the House failed to vote on the measure.
On July 21, 2014, President Barack Obama issued Executive Order 13672: Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity.
What It Does
Executive Order 13672 prohibits federal contractors from discriminating against LGBT employees or job applicants. It also extends protections against gender identity–based discrimination to federal employees and job applicants. Although eighteen states and Washington, D.C., already prohibit discrimination against gay and transgender employees, this order was the first federal action to promote LGBT equality in the private sector. (The Employment Non-Discrimination Act (ENDA)—which would prohibit workplace discrimination on the basis of sexual orientation or gender identity—passed the Senate in November 2013, but has not yet passed the House of Representatives.)
EO 13672 applies to all federal contractors and federally assisted construction contractors and subcontractors who do at least $10,000 in U.S. Government business in one year.
EO 13672 amended two previous executive orders. The first, EO 11246, signed by President Lyndon B. Johnson in 1965, prohibits federal contractors from discriminating against employees and job applicants based on “race, color, religion, sex, or national origin.” Obama’s order adds “sexual orientation” and “gender identity” to that list. The second, EO 11478, signed by President Richard Nixon in 1969, prohibits discrimination against federal employees and applicants based on “race, color, religion, sex, national origin, handicap, or age,” and was amended by Bill Clinton in 1998 to include “sexual orientation.” With EO 13672, Obama adds “gender identity” as a protected category under those rules.
Signed July 21, 2014, the order directed the secretary of labor to prepare regulations to implement the new protections for employees of federal contractors. On December 3, 2014, the Department of Labor announced a Final Rule changing the Office of Federal Contract Compliance Programs (OFCCP) regulations in 41 CFR Chapter 60 to prohibit discrimination based on sexual orientation or gender identity.
The Final Rule took effect April 8, 2015. After that date, federal contracting agencies were required to include gender identity and sexual orientation as prohibited bases of discrimination under the Equal Opportunity Clause in their contracts. The new regulations will not be added to pre-existing contracts, only those entered into or modified on or after April 8, 2015.
While the order has only just recently taken effect, the intent of EO 13672 is to bring federal employment and contracting in line with the leading edge of the business community in eliminating workplace LGBT discrimination.
The Williams Institute at UCLA Law School projects that the president’s order will ultimately protect 11 million more American workers from sexual orientation-based discrimination and up to 14 million additional workers based on gender identity.
In anticipation of the executive order, faith groups lobbied the president to exempt groups with religious objections to homosexuality from abiding by the new anti-discrimination rules. EO 13672 includes no such exemptions. However, religious groups receiving federal funds will still be permitted to take into account an employee’s religious beliefs—as established by President George W. Bush’s Executive Order 13279 in 2002—when making employment decisions. And religious organizations still have the right—as affirmed by the Supreme Court—to ignore discrimination laws in making employment decisions about their “ministers,” which includes but is not limited to clergy.
The action received support from a variety of sources:
- Human Rights Campaign (HRC) president Chad Griffen said President Obama’s action “cemented his legacy as a transformative leader” on LGBT rights.
- The Congressional LGBT Equality Caucus praised the order, saying its implementation moves the country “closer to ensuring that employees are judged by the quality of their work, not who they are or who they love.”
- ACLU executive director Anthony Romero called it “one of the most important actions ever taken by a president to eradicate LGBT discrimination from America's workplaces.”
- National Center for Transgender Equality executive director Mara Keisling hailed the action as "one step forward in the ongoing fight to end anti-transgender bias and prejudice in the workplace."
- See here for more positive reactions.
The action also received some criticism, mostly over its purported violation of religious liberty:
- Family Research Council senior fellow Peter Sprigg said that President Obama’s action orders employers to “put aside their principles and practices in the name of political correctness.” He added, “This level of coercion is nothing less than viewpoint blackmail that bullies into silence every contractor and subcontractor who has moral objections to homosexual behavior. This order gives activists a license to challenge their employers and, expose those employers to threats of costly legal proceedings and the potential of jeopardizing future contracts.”
- Ryan T. Anderson, a senior research fellow at the Heritage Foundation, said the order “undermines our nation’s commitment to pluralism and religious liberty.”
Contractors who work with the federal government are an important part of the U.S. economy. They serve as a critical adjunct to the federal workforce, staffing government departments in Washington, D.C., doing work in the field, or providing goods and services directly to agencies and departments. Some of the biggest corporations in America—Lockheed Martin, GE, Xerox—are federal government contractors. With the federal government being such a large consumer of contractor services, it holds a lot of power—through the procurement and contracting process—to ensure these businesses play by the rules, especially in how they treat their own employees.
Many federal contractors, however, have a poor track record in enforcing labor laws. While acts of Congress such as the Occupational Safety and Health Act and the Family and Medical Leave Act include enforcement provisions, and victims of violations have the right to seek redress in court, executive action can send a strong message in preventing violations and rewarding companies that have not participated in abuses.
On July 31, 2014, President Barack Obama issued Executive Order 13673: Fair Pay and Safe Workplaces.
What It Does
Executive Order 13673 seeks to promote compliance with all relevant U.S. labor laws by companies that are federal contractors. President Obama cited his authority as Chief Executive, as well as 40 U.S. Code 121: “The President may prescribe policies and directives that the President considers necessary” to administer Cabinet departments and agencies, as the legal foundation for the order. The order’s reach rests on numerous acts of Congress and previous executive orders dealing with workplace pay, safety, and anti-discrimination acts.
The executive order allows agencies and departments to take several specific actions in pursuit of encouraging fair and legally-compliant workplaces. The specific provisions of the order will apply to new contracts, beginning in stages in 2016:
- For contracts exceeding $500,000, the government agency can require the contracting party to disclose, as part of the pre-award contracting process, any Department of Labor judgements against it for the previous three years.
- The government agency will provide the contracting party with an opportunity to disclose steps to improve compliance or redress any previous judgement.
- After a contract has been awarded, the government agency counterparty can require the contracting party to provide updates every six months about information pertaining the additional violations or judgements. Government agency representatives in charge of the contracting process will be available to consult with contracting parties on strategies to improve compliance or redress specific grievances.
- Each agency involved in contracting will appoint a labor compliance adviser to coordinate with his or her individual department on the specific provisions of this order, sharing information and supporting contracting officers in their determination of compliance.
- Federal contractors cannot require employees who wish to use the courts to appear instead in front of an arbitrator in disputes involving the Civil Rights Act or sexual harassment or assault.
- If a contracting party is found to be a willful and repeat violator of any of the labor laws covered by the order, government agencies are empowered to use that as a basis for denying future contracts.
- To ensure maximum transparency and communication about rights under relevant federal statutes, paychecks for employees of contracting parties must disclose hours worked, overtime hours worked, and spell out all deduction.
- To streamline the contracting process, the General Services Administration will develop a single integrated website for contracting parties to submit relevant compliance information.
The executive order was issued on July 31, 2014, and its provisions went into effect immediately, although specific provisions are still in the planning phase and, per the order text, are not expected to be fully implemented until the end of 2016.
As the order will not be fully implemented, the current impact is not apparent, though it is likely contracting firms are updating their internal compliance procedures to ensure they can respond to the appropriate questions from the Department of Labor or the labor compliance adviser at the relevant department(s) with which they contract.
- The Campaign for America’s Future’s Dave Johnson celebrated the signing of the order, saying that measures will save taxpayers millions of dollars and protect tens of thousands of employees from discrimination and unfair or unsafe employer practices. He tied the order to a larger critique of the federal government's propensity to contract out employment that would have, in the past, gone to full-time federal employees: “President Obama’s efforts to at least stop wage theft and other illegal actions are a step in the right direction. Recognizing and explaining how privatization is impoverishing so many of us while greatly enriching a very few of us might lead to further actions to alleviate the problem.”
- Center for American Progress president Neera Tanden was also laudatory, citing how federal contractors often rank among the worst violators of wage, safety, and non-discrimination laws. According to CAP’s own research, “one in four government contractors . . . commit egregious workplace violations.”
- A coalition of twenty trade and professional associations criticized the order, citing their belief that “current federal acquisition regulations already have a process in place screening contractors’ integrity and business ethics. It challenged President Obama’s legal authority to make changes to the enforcement mechanisms inherent in previous congressionally passed laws. It called the enforcement requirements “highly subjective” and predicted the compliance requirements would cause an overall delay in contracting procedure.
The United States is the only developed country in the world that does not offer paid maternity leave. Currently, for both married and single families, 60 percent of households with children have no stay-at-home parents. Additionally, more than 60 percent of women with children under the age of five are working. However, only 13 percent of workers have access to paid family leave through their employers.
Currently, the only federal policy in place that has a family leave contingent is the Family and Medical Leave Act, which ensures twelve weeks of unpaid leave. Giving up pay for such a long period of time, however, is financially infeasible for many employees, and furthermore, while dismissal of a covered employee for scheduling such leave is illegal, employees often feel at risk of losing their jobs when taking unpaid leave.
There are some states and localities that have recognized the need to implement a more progressive family leave policy. Currently, laws that guarantee workers the right to earn paid sick days are in place in Connecticut, the District of Columbia, Jersey City and Newark (New Jersey), New York City (New York), Portland (Oregon), San Francisco (California), and Seattle (Washington). New laws guaranteeing workers the right to earn paid sick days will go into effect in 2015 in California, Massachusetts, several cities in New Jersey, Eugene (Oregon), and Oakland (California). And statewide paid family leave insurance programs exist in California, New Jersey, and Rhode Island.
But when comparing national maternity leave policy, the United States falls way behind:
Legislation establishing a national paid sick leave policy was recently introduced into Congress. The Healthy Families Act, sponsored by Representative Rosa DeLauro (D-CT) and Senator Patty Murray (D-WA), would require employers who employ fifteen or more employees each workday for twenty or more workweeks a year to provide their workers up to seven paid sick days each year. The bill has been referred to committee, however, and thus is quite far from becoming law.
On January 15, 2015, President Barack Obama signed a presidential memorandum: Modernizing Federal Leave Policies for Childbirth, Adoption, and Foster Care to Recruit and Retain Talent and Improve Productivity.
What It Does
Previously, federal employees had been entitled twelve weeks of unpaid leave under the Family and Medical Leave Act as well as any already accrued annual or sick leave. Now, the presidential memorandum requires that departments and agencies must advance six weeks of paid sick leave if requested by employees for birth, adoption, or other eligible uses, such as caring for a family member with a serious health condition. This annual leave could also be used by employees for placement of a foster child in their home.
The memorandum will allow mothers the opportunity to recuperate after childbirth, even if they have not yet accrued enough sick leave. It will also allow spouses and partners to care for new mothers during their recuperation periods and will allow both parents to attend proceedings relating to the adoption of a child.
The reason the administration is addressing parental leave as sick leave is because it cannot unilaterally institute paid family and medical leave for federal employees without passing legislation, as the FMLA specifies that said leave is without pay.
The Office of Personnel Management has released its updated leave policies, and agencies have sixty days to make any necessary changes to their policies.
This memorandum, which applies to executive agencies, extends the benefits to up to 2,668,000 federal employees.
The concept of paid sick leave enjoys widespread support (as noted, a number of state and local legislatures have already passed laws addressing the issue).
- Debra L. Ness, president of National Partnership for Women and Families, stated that “The National Partnership applauds the administration for this historic move” and that “the nation will be much better off if Congress follows his lead.” (Read more information about the memorandum in their summary.)
Some opponents, however, have argued that paid sick leave and paid family leave would negatively impact businesses. Such criticism does not hold regarding federal employees, and the evidence suggests that even concerns over the impact on business are overstated.
- The Center for Economic and Policy Research released a report two years after Connecticut passed its law requiring employers to allow workers to earn paid sick leave, showing that most employers reported modest to no impact of the law on their costs and more than three-quarters of surveyed employers expressed support for the law.
Under the Employee Retirement Income Security Act of 1974 (ERISA), as well as Section 4975 of the Internal Revenue Code (IRC), any individual who “renders investment advice for a fee or other compensation, direct or indirect” with respect to tax-preferred retirement accounts (which include both 401(k)s and IRAs) must abide by fiduciary standards. Based in the law of trusts, a fiduciary duty is the strictest duty of care in the U.S. legal system, obligating the fiduciary to act in the interest of another party (the “principal”). Typically, this requires avoiding conflicts of interest and prohibits investment advisers from profiting from the relationship without the principal’s consent.
In the specific context of retirement savings, ERISA, which governs employer-sponsored retirement plans, such as 401(k)s, demands the undivided loyalty of fiduciaries in their dealings with plan participants and beneficiaries, and it holds them personally liable for losses resulting from violation of these responsibilities. The IRC provides a more limited set of protections for IRAs, including an excise tax penalty for violations. Both ERISA and the IRC forbid “prohibited transactions” where conflicts may arise.
Under ERISA and the IRC, the Department of Labor has the authority to promulgate regulations determining when, and to what degree, the fiduciary standard applies to tax-preferred retirement account advisors. However, it last did so comprehensively in 1975—a time at which 401(k)s did not exist and IRAs were far less common than they are today. Although well-meaning, the narrow, rigid definitions in existing regulations allow investment advisors—who include registered investment advisors (RIAs), brokers, and other investment professionals—to elude fiduciary responsibilities through a variety of easily-exploited loopholes, and to thus be compensated in ways that directly conflict with their clients’ best interests.
Broadly speaking, conflicted payments consist of compensation that depends on an advisee’s actions; in these situations, advisors have incentives to steer their clients into decisions that generate higher fees, independent of the merits of those choices. Among the more common perverse payment schemes are brokerage commissions (different investment products carry different fees), revenue-sharing (some mutual funds pay advisors more than others), and proprietary bond mark-ups (selling bonds from a firm’s own account can be more profitable than selling bonds from another firm)—all of these can encourage advisers to push investments that are more costly or worse-performing than alternatives. Conflicted advice can also lead to too-frequent trading, which can generate unnecessary transaction costs and expensive timing errors. In addition, fiduciary loopholes allow advisors to generally avoid punishment for providing imprudent or disloyal advice.
As set forth in the 1975 rule, the current fiduciary standard is defined by a five-part test. To be deemed a fiduciary—that is, as rendering investment advice for a fee—an advisor must meet all five parts of the test by: (1) making recommendations to buy or sell securities or other property, or by advising as to the value of such investments (2) on a regular basis (3) pursuant to a mutual understanding that the advice (4) will be the primary basis for investment decisions and (5) individualized to the particular needs of the retirement plan.
The narrowness of the test makes it a relatively routine matter for advisors to escape fiduciary responsibilities and to accept conflicted payments. For example, the “regular basis” requirement allows employers to bring in “one-time” consultants to make consequential investment decisions; regardless of the magnitude of the transaction, the non-recurring nature of the advice means that the consultants are not held to the fiduciary standard. A particularly problematic loophole concerns the rollover of 401(k) assets to IRAs; this process accounted for $300 billion worth of transactions in 2012, and it is expected to expand to $2.5 trillion within five years. Though rollovers can be the most important (and one of the most challenging) financial decision a family ever makes, their one-time nature means that the fiduciary standard usually does not apply.
The costs of conflicted advice are considerable. The Council of Economic Advisors estimates that conflicted advice costs investors approximately one percentage point in annual returns. With an estimated $1.7 trillion in IRA assets tied up in conflicted investments, the investors’ yearly toll is $17 billion. And because investment returns compound, the ultimate impact on retirees is even greater. Assuming non-conflicted investments would return 6 percent annually and inflation averages 2 percent, the loss of one percentage point a year for 35 years reduces retirement savings by more than a quarter; in concrete terms, a $10,000 investment would grow to just $27,500 by retirement instead of $38,000.
Losses this large can severely compromise retirees’ standards of living. It is also likely that the CEA report understates the true economic cost of conflicted advice, as it considers only a subset of IRAs (load mutual funds and annuities), which account for only a fraction of all retirements savings. Other estimates also show that conflict advice creates huge loses. The Department of Labor, for example, estimates conflict-related underperformance will cost IRA investors $210 billion during the next ten years and $500 billion over the next twenty years. And because this projection considers only mutual funds investments, and because it relies upon conservative assumptions, it likely understates the full cost. Qualitatively, though, the impact is clear: conflicted advice extracts a steep price from savers and impairs economic efficiency.
After several years of development, on April 20, 2015, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued a Notice of Proposed Rulemaking to revise conflict of interest rules for retirement investment advice, primarily by updating and broadening the regulatory definition of “fiduciary” under both ERISA and the IRC. The intent of the revision is to better protect retirement savers, beneficiaries, and retirement plan sponsors (i.e., employers) from conflicts of interest, while also modernizing fiduciary rules to better reflect statutory intent in light of the rapid evolution of the retirement savings landscape.
What It Does
The proposed rule embodies two key principles, the first of which is to broadly redefine fiduciary investment advice to limit conflicts of interest. The new fiduciary standard can be distilled into three prongs. The first concerns the nature of the advice. In general, the following categories of advice are covered:
- investment recommendations
- investment management recommendations
- investment appraisals
- recommendations of persons to provide provide paid investment advice or management
The second describes the persons providing such categories of advice, who are considered fiduciaries if they either:
- represent that they are acting as a fiduciary under ERISA or the IRC, or
- provide advice pursuant to an agreement, arrangement, or understanding that the advice is individualized or specifically directed to the recipient.
So long as the first two prongs are satisfied and the advisor is compensated, either directly or indirectly (prong three), the advisor is a fiduciary.
This new definition of fiduciary is considerably more comprehensive than the one in existing regulation. Notably, the new rule explicitly covers IRA rollovers, thereby guarding against some of the most egregious abuses. At the same time, however, the proposed definition includes seven “carve-outs” to avoid unintentionally limiting types of communications and transactions that are appropriately not considered fiduciary in nature:
- sales pitches to large, expert plan clients
- recommendations about swap transactions regulated by the Securities Exchange Act or the Commodity Exchange Act
- recommendations made to plan sponsors by their own employees, so long as the employees are not compensated for doing so
- marketing of “platforms” of investment options used by plan fiduciaries to populate investment menus
- providing investment data or identifying investment options meeting criteria specified by plan fiduciaries
- appraisals provided for disclosure or reporting purposes
- investment or retirement education
Such carefully tailored carve-outs reflect the rule’s second key principle: avoiding inefficiency-provoking regulatory heavy-handedness. Beyond the transactional carve-outs, the main way the proposed rule accomplishes this objective is to create a new set of flexible, principles-based prohibited transactions exemptions (PTEs) to (largely) replace the myriad of narrow, transaction-specific exemptions that currently exist. Such exemptions would allow investment advisory firms to continue to utilize common compensation practices—even when such practices would generally run afoul of the new fiduciary standards—so long as the the firms pledge to abide by certain standards that commit them to delivering advice in the best interest of their clients. Permitting such exemptions is intended to prevent unintended inefficiencies and unnecessarily large compliance costs.
Chief among the new exemptions is the “Best Interest Contract Exemption,” which allows advisors and firms to be paid in common, but potentially conflictual ways, such as through commissions or revenue-sharing—provided the firms and advisors contractually affirm their fiduciary status, comply with impartiality standards, clearly disclose conflicts of interest, and adopt business practices reasonably designed to minimize the impact of such conflicts. In particular, the advisor and the firm must promise to give advice that is in their clients’ best interest, while avoiding misleading statements, unreasonable compensation, and violating other laws. By allowing firms to retain some discretion in compensation, the best interest exemption seeks to achieve the overarching aim of protecting consumers at the lowest possible social cost. In essence, the exemption frees firms to satisfy the rule’s requirements in the manner they deem most efficient.
Other significant exemptions include a “principal transactions” exemption and a “credit extension” exemption. The principal transactions exemption would allow fiduciaries to make otherwise prohibited purchases and sales of debt securities (that is, bonds) out of their own accounts in transactions involving client retirement accounts, so long as conditions similar to the best interest exemption are met. The credit extension exemption would allow fiduciaries to be compensated when they extend credit to retirement plans and IRAs in order to avoid failed securities transactions; in the absence of the exemption, fiduciaries are typically prohibited from loaning funds to clients. In addition, the Department of Labor is requesting comment for whether the PTE’s should include a “low-fee” exemption that would allow advisors to receive conflicted payments in cases where they recommend the lowest-fee products in a given product class.
Following his 2015 State of the Union address championing “middle-class economics,” President Obama, on February 23, 2015, announced the Department of Labor would be re-issuing the reconfigured fiduciary rule. On April 14, 2015, the Department of Labor made the details of the proposed rule public, while also releasing its regulatory impact analysis. The proposed rule was published in the April 20th issue of the Federal Register, with the proposed transaction exemptions published separately in the same issue.
The public had until July 6, 2015, to comment on the proposed rule. The Department of Labor is currently reviewing the comments and will then draft a final rule, in a process that can take upwards of a year (for major rules). An OMB review will follow, which can last an additional 90 days. The final rule will be effective no sooner than 30 days after its publication in the Federal Register. In all likelihood, given these constraints, it will be some time before a new fiduciary standard becomes operative. Indeed, even the timeline outlined here may be an understatement, as the process can also be delayed by legal challenges and congressional review.
As the Council of Economic Advisors’ report makes clear, there are substantial gains to be had from reducing conflicted payments in the retirement savings sector. The Department of Labor anticipates that the new fiduciary standards will generate large returns for investors. While quantifying these gains is complicated by a lack of data, the department’s regulatory impact analysis estimates that, if the rules are successful at eliminating underperformance associated with variable front-end loads (a type of conflicted payment), IRA investors would gain between $88 billion and $100 billion over 20 years. Moreover, front-end loads are only one type of conflicted payment; scaling up the benefits to all types of conflicts and including the impacts on employer-sponsored plans as well could reap gains an order of magnitude larger. The advantages may be greater still if the clarity and flexibility of the new rules promotes transparency, competition, and innovation in the retirement savings marketplace.
Given trends in retirement savings, more and more Americans will be impacted in the coming years. During the last four decades, traditional pensions’ share of Americans’ retirement assets shrank from 70 percent to just about a third; today, half of U.S. retirement savings are in defined contribution plans and IRAs. If the new rule took effect today, 75 million Americans would benefit—and their numbers are growing rapidly.
Chief among the proposal’s opponents are those whose business would be most affected: investment advisors, brokers, and the financial services industry more generally. Major industry trade groups, including the Securities Industry and Financial Markets Association (SIFMA), the Financial Services Institute, the American Society of Pension Professionals and Actuaries, and the National Association of Plan Advisors have been quick to wage a media campaign calling into question the proposal’s merits. The most common challenges are that the new rules would limit investor choice, increase advisement costs, and restrict investor education. Opponents are also apt to question the Department of Labor’s jurisdiction—or at least to characterize the agency’s regulations as duplicative—given that the activities at issue are also regulated, to a degree, by the SEC and the Financial Industry Regulatory Authority. Congressional Republicans have allied themselves with these lines of attack.
Equally predictable are the proposal’s supporters, who include a number of prominent advocates for investors and retirees, such as the American Association for Retired People (AARP), Better Markets, the Financial Planning Coalition, and the Consumer Federation of America. These supporters stress the importance of investor security, emphasize the financial benefits to retirees, and urge the administration to move expeditiously through the rulemaking process.
Unions have played an important role in the American labor market for well over a century and are a critical force for promoting democratic values in workplaces across the country. Since the 1970s, however, unions have seen a dramatic decline in membership, particularly in the private sector. This has been attributed to a number of factors, including increased employer opposition to labor organizing and the vast resources employers have invested in anti-unionization campaigns.
The right to engage in collective bargaining and unionization became law under the National Labor Relations Act (NLRA; also known as the Wagner Act) in 1935. The National Labor Relations Board (NLRB) was created under this act, and it has the power to enforce and interpret the NLRA. The NLRB was a direct successor to the National Labor Board that had existed under the National Industrial Recovery Act of 1933, which was created by an executive order from President Franklin D. Roosevelt. It is intended to be an independent body, with five members appointed by the president, three of whom are typically of the administration’s party.
When seeking recognition from an employer as the sole representative allowed to collectively bargain a contract for a given group of workers, employees must file a petition with the NLRB, which then determines if the petitioners constitute an appropriate bargaining unit and decides whether an election should be held based on the level of employee interest. If the petition passes these hurdles, the NLRB then administers an election, and, if a majority of eligible employees vote in favor, the employer is legally required to recognize and bargain with organized unit.
Many elections, however, do not go smoothly, and it is the responsibility of the NLRB in this process to settle disputes between labor and management. To do so, the NLRB is empowered either to make rules or to adjudicate cases. Unlike most other federal agencies, the NLRB has typically chosen to act as a court, such as when it issued a decision on December 11, 2014, that overturned precedent and allowed workers to use their workplace e-mail accounts to organize in their free time. (This more easily allows for virtual organizing, a topic The Century Foundation explores in a recent report.) Occasionally, however, the NLRB chooses to use its rulemaking powers, such as its 2011 attempt to streamline and improve election processes. That rule was overturned by a federal appeals court because the NLRB lacked a quorum of board members when it voted on the new measure.
While NLRB rules are not technically executive actions, the work it does is widely seen as a political tool of the administration in office due to its limited reliance on precedent, which has led to a number of inconsistent rulings on contested issues, and due to the fact that its five-year terms facilitate significant turnover during a given presidential administration. For these reasons, rules and decisions by the NLRB are often seen as an extension of executive branch policy.
In December 2014, the NLRB adopted final rules on election procedures by a three-to-two vote that split along party lines. The rules seek to “streamline Board procedures, increase transparency and uniformity across regions, eliminate or reduce unnecessary litigation, duplication and delay, and update the Board’s rules on documents and communications in light of modern communications technology.” They took effect on April 14, 2015.
What It Does
Several of the new rules were aimed at modernizing the filing and communications process that occurs during a union petition and election. The NLRB now:
- allows documentation and petitions to be submitted online via email instead of through the mail or by fax;
- requires employers to disclose the e-mails and phone numbers of the employees (if they are available to the employer) to organizers within two business days of the approval of an election agreement; and
- provides all parties, including employers, with more information about the litigation and election process so that they can make more informed decisions about the election process.
The updated procedures also standardize some of the election processes across the entire NLRB system, which comprises twenty-six regional offices. Before the new rule, scheduling of pre- and post-election hearings depended on the schedule of whichever regional office handled the election. Now, all pre-election hearings will be held eight days after a hearing notice is served, and all post-election hearings will begin twenty-one days after the ballot count.
The most controversial of the new rules pertain to changes that shorten the petitioning and election-scheduling process:
- parties are now required to state any issues in dispute before the pre-election hearings;
- any issues that do not affect the ability to schedule an election are now deferred to post-election hearings;
- elections will not be automatically stayed to consider any requested review of the regional director’s decision, a process that has previously delayed elections for twenty-five to thirty days, although doing so rarely has affected the result of an election;
- briefs will now only be submitted after the election if the regional director deems them necessary; and
- the NLRB now does not have to review issues that were not under dispute.
These rules are intended to standardize and speed up the process of petitioning and holding an election, but they have also served to level the playing field for workers. Organizers now have greater access to information about employees, which was previously only available to employers. By reducing the time between the filing of a petition and the election, and by limiting the ability of the employers to intentionally delay the election, employers have less time to use the intimidation tactics that have become common practice.
For the moment, the rules remain in effect, although they have undergone several serious challenges in Congress and the courts:
- Senate Joint Resolution 8, which would have overturned the NLRB rules, passed both the House and Senate with votes almost entirely along partisan lines, but it was vetoed by President Obama on March 31.
- Multiple cases have also been brought to federal courts by business groups, including the U.S. Chamber of Commerce. One such case was dismissed by a judge in Texas, and another awaits a decision.
In the first month since the new procedures went into effect, the petition and election process has already begun to change. This includes:
- a 35 percent decline in the number of days between the filing of a petition and the scheduling of an election, as compared to the same time period last year, and
- a 17 percent increase in petitions filed, as compared to the same time period last year.
Whether the changes are directly attributable to the new rules will require further study, and it is important to note that the success rate of elections has seen no discernible change.
As might be expected, conservatives and business interests adamantly opposed the changes at every step of the process. During the legislative battle over the rules, House Speaker John Boehner stated:
The NLRB’s ambush election rule is another example of the Obama administration expanding Washington’s reach at the expense of American small businesses and workers. What is supposed to be a fair and neutral agency has instead become a tool for the administration to advance an agenda dictated by the president’s special interest allies. The ambush election rule the NLRB finalized last year will deny workers the opportunity to gather all the information they need before deciding whether to join a union.
President Obama and labor unions have supported the new procedures. Obama described them as “modest but overdue reforms to simplify and streamline private sector union elections” and said:
Workers need a strong voice in the workplace and the economy to protect and grow our Nation’s middle class… Workers deserve a level playing field that lets them freely choose to make their voices heard, and this requires fair and streamlined procedures for determining whether to have unions as their bargaining representative.
Richard Trumka, president of the AFL-CIO, released a statement saying:
The modest but important reforms to the representation election process announced today by the National Labor Relations Board will help reduce delay in the process and make it easier for workers to vote on forming a union in a timely manner. Too often, lengthy and unnecessary litigation over minor issues bogs down the election process and prevents workers from getting the vote they want. . . . Strengthening protections for workers seeking to come together and bargain collectively is critical to workers winning much-deserved wage gains and improving their lives.
The No Child Left Behind (NCLB) Act of 2001, signed January 8, 2002, by President George W. Bush, requires all public schools to administer annual standardized tests in order to assess school performance and address achievement gaps. Under the act, schools that consistently fail to meet their state’s Adequate Yearly Progress (AYP) standards face a range of consequences, from being required to develop a two-year improvement plan to mandatory “restructuring,” which could involve closings and staff changes. The law set a goal that every student nationwide would be performing at grade level in reading and math by 2014.
Intended to improve public education by increasing accountability and enforcing higher standards, NCLB drew criticism from teachers and administrators for fostering a myopic focus on test taking. And while the law was initially praised for drawing attention to achievement gaps between racial and socioeconomic groups, evidence has been mixed on whether it has significantly helped to close those gaps.
As AYP targets rose over time under NCLB, more and more schools found themselves failing to meet state standards—facing onerous sanctions as a result. Pressure to improve test scores likely contributed to major cheating scandals in multiple states. Congress declined to reauthorize NCLB in 2007, but didn’t get around to replacing it with anything, so it stayed on the books. In a 2009 speech, Education Secretary Arne Duncan described the proficiency goal set for 2014 as “utopian.”
In March 2010, the Obama administration proposed sweeping changes to NCLB that would ease pressure on school districts by replacing the pass-fail accountability system with one that took into account individual student growth, graduation rates, and other measures besides test scores. The Department of Education’s proposal would also have realigned the ESEA with the president’s education reform goals, including rewarding high performing schools, districts, and states with extra federal funds—similar to the administration’s incentive-based program Race to the Top. Despite bipartisan support for some sort of reform, the president’s plan faced steep opposition from teachers’ unions and conservatives. Even as some states began to openly defy NCLB to avoid implementing sanctions, the president’s reform package languished in Congress.
For school year 2010–11, nearly half (48 percent) of the nation’s public schools failed to meet AYP, the largest portion since NCLB took effect in 2002. Administrators, school boards, and teachers unions all urged the Department of Education to offer regulatory relief in the absence of legislative reform.
On August 8, 2011, Secretary Duncan announced that the federal government would allow states to apply for waivers to seek regulatory relief from NCLB’s more unpopular provisions, a move he had first mentioned in June. To qualify for waivers, states would have to adopt “college and career-ready” academic standards, outline plans to transform their lowest-performing schools, and establish new ways of measuring teacher and principal performance.
What It Does
On September 23, Secretary Duncan sent letters offering ESEA Flexibility to every state government. The waivers were made available pursuant to the secretary of education’s authority in Section 9401 of the ESEA to waive, with certain exceptions, any statutory or regulatory requirement of the ESEA for a state that receives ESEA funds. Under the waivers:
- States would be free to set their own “ambitious but achievable” annual achievement goals and ignore the 2014 deadline for 100 percent proficiency.
- Districts would no longer be required to pursue NCLB corrective measures against schools that fail to meet AYP.
- States would be permitted to allocate certain ESEA funds to particularly troubled schools (“priority schools”) and those with particularly severe achievement gaps (“focus schools”)—or to reward particularly high-achieving low-income schools with extra funds.
- States would be allowed to develop and implement “meaningful evaluation and support systems” for teachers and no longer face penalties for failing to staff only ‘highly qualified’ teachers—that is, fully certified teachers with bachelor’s degrees and expertise in their subject matter(s), as required under NCLB.
In order to receive flexibility through these waivers, states would have to comply with the following principles—and present a plan for how they would ensure compliance:
- Adopt college and career readiness standards, which would continue to be assessed by yearly standardized tests.
- Reward high-achieving and high-progressing Title 1 schools (those serving predominantly low-income students) and focusing.
- Focus improvement efforts on the lowest performing Title 1 schools and those with the most severe achievement gaps.
- Create guidelines for evaluating teachers and principals based in part on student performance.
- Reduce redundant reporting requirements and unnecessary administrative burdens placed on districts and schools.
On February 9, 2012, the Obama administration announced the first ten waiver recipients: New Jersey, Massachusetts, Tennessee, Georgia, Florida, Kentucky, Indiana, Colorado, Minnesota, and Oklahoma.
Forty-three States, the District of Columbia, and Puerto Rico have been approved for ESEA flexibility. Wyoming, Iowa, and the Bureau of Indian Education all currently have pending requests.
On November 13, 2014, the Department of Education announced that states would have the option of seeking waiver renewals in Spring 2015 that would extend to the end of the 2018–19 school year. The deadline for submitting renewal requests was March 31, 2015.
If Congress were to pass NCLB reform, the waivers could be rendered null. Earlier this year, the Republican-backed Student Success Act passed through the House education committee in February. President Obama, however, threatened to veto that bill, which would allow states to redistribute Title 1 funding, potentially harming low-income schools.
On April 7, Senators Lamar Alexander (R-TX) and Patty Murray (D-WA) announced a new bipartisan reform framework. It remains to be seen exactly what effect this reform package, if passed, would have on the state waivers.
Perhaps the biggest impact of the waiver system is that many schools identified as “failing” under NCLB provisions are no longer targets for intervention. A 2013 New America Foundation report found that, across sixteen states, 4,400 schools that were slated for improvement under NCLB “were no longer identified as priority or focus schools under waivers.”
This is primarily because the waivers allow states to assess a school’s performance relative to that of other schools in the state, whereas the AYP standards under NCLB were pre-determined and absolute. Under NCLB, 90 percent of schools in a single state could be identified as “failing” and in need of corrective action—as was the case in Florida in 2011—even if many of those schools were high-performing relative to other schools in the state.
In providing relief from NCLB, the federal government sought to free up states and districts to focus their energy and resources on only the most in-need schools. Under the waiver system, states must only intervene in 15 percent of their Title 1 schools—by identifying them as either “priority” or “focus” schools. Whether or not a school will be slated for intervention depends on how other schools in the state perform.
Relief from NCLB regulations has granted a greater degree of freedom to state education officials to pursue policies that conform to the needs of their states, and they’re hopeful that new strategies will pan out for students. Of the thirty-eight states that responded to a 2013 Center for Education Policy survey on NCLB waivers, thirty-five expected their own accountability systems to do a “better job than NCLB of identifying schools in need of improvement.”
Most states have adopted the Common Core State Standards—curricular standards developed by the National Governor’s Association (NGA) and the Council of Chief State School Officers (CCSSO)—to fulfill the waiver guideline requirement for a statewide accountability system. However, the Department of Education does not require states to adopt Common Core in order to receive an NCLB waiver, so long as they institute some form of statewide “college-and-career-ready” standards.
Teacher’s unions, school administrators, school board officials, and think tanks have been particularly supportive of the waivers:
- National Education Association (NEA) president Dennis Van Roekel hailed the waivers for setting “more realistic goals for schools, while maintaining ESEA’s original commitment to civil rights, high academic standards and success for every student.”
- American Federation of Teachers (AFT) president Randi Weingarten commended the administration, in a February 9, 2012 statement, for “responding to the calls for change from parents, teachers and administrators” and offering temporary relief—but nonetheless referred to waivers as an “imperfect solution.”
- American Association of School Administrators (AASA) welcomed regulatory relief but objected to conditional waivers.
- National Association of Elementary School Principals (NAESP) applauded the waivers for providing flexibility and protecting principals from automatic dismissal under NCLB improvement.
- National Association of Secondary School Principals (NASSP), echoed AASA's position: "While we are disappointed that NCLB relief is coming in the form of waivers rather than [unconditional] regulatory relief, the nation's principals are breathing a bit easier.”
- National Association of State Boards of Education (NASBE) welcomed waivers but repeated its position that “what we need is a comprehensive new iteration of the Elementary and Secondary Education Act.”
- National School Boards Association (NSBA) called waivers a “positive step” but objected to making relief conditional.
- National PTA applauded “the administration’s efforts to provide much-needed flexibility and temporary relief to states” while continuing to call on Congress to “fix the law through the reauthorization process.”
- The Center for American Progress issued a report on the waivers that stated “with little prospect for bipartisan cooperation in sight, the Obama administration is wise to take action now to ensure states, districts, and schools move forward with education reform while receiving the flexibility they need.
Some members of Congress, however, have voiced criticism of the waivers:
- Congressional Republicans have characterized the waivers as an executive power-grab. House education committee chair Representative John Kline (R-MN) said in September 2011, “In my judgment, he is exercising an authority and power he doesn’t have. We all know the law is broken and needs to be changed. But this is part and parcel with the whole picture with this administration: they cannot get their agenda through Congress, so they’re doing it with executive orders and rewriting rules. This is executive overreach.”
- A 2011 Congressional Research Service (CRS) report commissioned by Representative Kline confirmed the secretary of education’s authority to grant waivers under the ESEA, but questioned whether he had the legal authority to make them conditional on state’s adopting the administration’s preferred education policies.
- On February 12, 2014 Representative George Miller (D-CA), top Democrat on the House education committee, along with leaders of the Black, Asian Pacific American, and Hispanic Caucuses sent a letter to Secretary Duncan criticizing the administration for approving state policies under the waiver process that insufficiently address the needs of minority, disabled, and English learner students.
Even among supporters of the waivers, there has been some criticism of the metrics suggested to replace NCLB:
- American Federation of Teachers (AFT) president Randi Weingarten criticized the new waiver guidelines, issued November 13, 2014, for promoting an over-reliance on testing, "At best, it permits, and at worst, it rewards, states that habitually over-test—like Florida, whose kids now lose an average of seventy days of instruction due to testing. It lacks a concrete strategy to address the out-of-classroom factors that account for two-thirds of what affects student achievement. And sadly, even when focusing on teachers as a silver bullet, it lacks the answer to how we recruit, retain and support teachers at hard-to-staff schools."
In 1961, President John F. Kennedy issued Executive Order 1092, which coined the term “affirmative action” by mandating that projects financed with federal funds take affirmative action to ensure that hiring and employment practices are free of racial biases. The concept was taken up as part of an effort to provide improved opportunities to minorities for accessing the full spectrum of the public good, including our system of education.
To this day, however, racial minorities are still underrepresented in higher education—and our system is actually becoming increasingly stratified.
While the nation has attempted to improve access to quality public education and particularly address the underrepresentation of minorities in higher education, the U.S. Supreme Court, has actually placed increasing restrictions on the use of race-based affirmative action as a remedy. As seen in the following court cases, the application of affirmative action in primary, secondary, and higher education has recently become increasingly difficult.
- Grutter v. Bollinger: On June 23, 2003, the Supreme Court upheld University of Michigan Law School’s consideration of race in admissions because the school’s affirmative action policy was narrowly tailored and conducted highly individualized review of each applicant. However, in a companion case, Gratz v. Bollinger, the Court also ruled that University of Michigan’s undergraduate admissions system, which awarded a standard numerical boost to all black, Hispanic, and American-Indian applicants, was mechanical and thus, unconstitutional.
- Parents Involved in Community Schools (PICS) v. Seattle District No. 1: On June 28, 2007, the Supreme Court found the Seattle School District’s plan, where race was used as the second most important tiebreaker to decide which students would be admitted to oversubscribed schools, to be unconstitutional.
- Fisher v. University of Texas: On June 24, 2013, the Supreme Court made clear that universities could use race as a factor in admissions, but only after they had proven that “available, workable race-neutral alternatives do not suffice,” to produce racial diversity. In addition, the Court held, for the first time, that universities would not receive deference on the question of whether the means employed to produce racial diversity are narrowly tailored.
- Schuette v. Coalition to Defend Affirmative Action: On April 22, 2014, the Supreme Court upheld a state constitutional amendment that bans public universities and colleges in Michigan from implementing a race-sensitive policy.
With increasingly tighter circles being drawn around the practice of race-based affirmative action in education, schools have required guidance on what they could and could not do in achieving diversity.
Following the 2007 Parents Involved decision, the George W. Bush administration issued guidance about how and when educational institutions could use race in their decision making. The Bush guidance, however, was criticized by civil rights groups as being overly restrictive.
On December 2, 2011, the Obama administration’s Department of Justice and Department of Education replaced the Bush administration guidance with two documents detailing the options available to educational institutions seeking to promote diversity yet remain in compliance with the three Supreme Court decisions, Grutter v. Bollinger, Gratz v. Bollinger, and PICS v. Seattle:
- Guidance on the Voluntary Use of Race to Achieve Diversity and Avoid Racial Isolation in Elementary and Secondary Schools
What It Does
By issuing the two guidances, the administration is showing its support for diversity in educational institutions and making the issue a priority in the face of court decisions restricting race-based affirmative action. The guidances lay out the legal standards of the Supreme Court decisions as interpreted by the administration, but do not shield institutions that follow them from legal disputes.
Postsecondary Education. The guidance on using race in primary and secondary education outlines key steps for implementing plans to achieve diversity, which include considering whether there are race-neutral approaches—such as giving a leg up to economically disadvantaged students of all races—that will produce sufficient levels of racial and ethnic diversity. When there are no such alternatives available, institutions are permitted to take into account an individual student’s race among other factors to achieve diversity, but must evaluate each student as an individual, making sure that race is not the defining characteristic. An institution may only consider the race of individual students if it does so in a manner that is narrowly tailored to meet a compelling interest.
The guidance then goes on to outline various approaches to diversity, including the following:
- Admissions. An institution could consider race-neutral options, such as a student's socioeconomic status, first-generation college status, or geographic residency.
- Pipeline Programs. An institution could partner with school districts or other programs to introduce potential applicants to the institution, such as high schools with school-wide socioeconomic characteristics, community colleges, or Historically Black Colleges and Universities (HBCU).
- Recruitment and Outreach. An institution’s recruitment and outreach procedures could target school districts that are underrepresented geographically or that have students that are predominantly from low-income households.
- Mentoring, Tutoring, Retention, and Support Programs. In order to not only enroll, but retain a diverse group of students, institutions could provide academic support to students who are at risk of not completing their programs.
Elementary and Secondary Education. The guidance on using race in postsecondary education admissions outlines key steps for implementing plans to achieve diversity, which fall in line with the sister guidance above. The guidance then goes on to outline various approaches to diversity, including the following:
- School and Program Siting Decision. A school district might site a new school at a location that would enroll a socioeconomically and racially diverse student population.
- Decisions about Grade Realignment and Feeder Patterns. A school district might choose to feed underperforming elementary schools into higher performing middle schools if this also helps to achieve racial diversity or avoid racial isolation.
- School Zoning Decisions. A school district could create attendance zones that consider the relative racial composition of areas in combination with the average household income and educational levels of parents in those areas.
- Open and Choice Enrollment Decisions. A school district in which students of different races are concentrated in different attendance zones could implement a district-wide lottery system that allows parents to identify and rank a certain number of schools and then randomly assigns students based on the parents’ choices.
- Admission to Competitive Schools and Programs. A school district could identify race-neutral criteria for admission to a school (for example, minimum academic qualifications and talent in art) and then conduct a lottery for all qualified applicants rather than selecting only those students with the highest scores under the admission criteria, if doing so would help to achieve racial diversity or avoid racial isolation.
- Inter- and Intra-District Transfers. A school district might categorize neighborhoods based on average household income and allow a student from a geographic area with a lower than average household income to transfer out of his or her assigned school and into a school that draws from a geographic area with a higher than average household income.
Following the 2013 U.S. Supreme Court decision in Fisher v. University of Texas, the Department of Education and the Department of Justice issued a joint letter suggesting that the earlier 2011 guidance remained in effect.
Likewise, on May 6, 2014, the administration released a letter stating that the Schuette v. Coalition to Defend Affirmative Action still left the guidances intact.
The guidance to school districts and colleges replaced earlier Bush administration guidance, which was seen by critics as overly restrictive in its prohibition on the use of race to promote diversity. While the new guidance leans toward a more liberal application, in the end it is still simply a guidance, and schools that employ race-based affirmative action are not protected against legal action.
The Poverty Race and Research Action Council (PRRAC), in their 2011–12 annual report, stated about the guidance on elementary and secondary schools:
"This document, which the Coalition had been demanding for over 2 years, instructs states and local school districts about how they can legally achieve school integration. The Guidance recognizes that racial diversity and reduction of racial isolation are compelling government interests, and endorses “race conscious” measures to promote school diversity . . . importantly, the Guidance also clarifies that race of individual students can still be taken into account to achieve diversity in situations where “race-neutral and generalized race-based approaches would be unworkable.”
Robert Clegg, the president of the Center for Equal Opportunity (CEO), stated in an article:
"The fact is that this guidance is designed not to help schools follow the law, but to push them to adopt dubious race-based policies that the Supreme Court has warned against, and that have prompted lawsuits in the past, but that the Obama administration and its political allies stubbornly support."
Since the passage of the G.I. Bill in 1944, access to a reduced-cost college education has become a core part of the benefits afforded to military veterans. The enactment of the “Post-9/11 G.I. Bill” in 2008 strengthened this federal commitment via the creation of several new initiatives tailored to recently discharged servicemembers from the wars in Iraq and Afghanistan.
On balance, G.I. Bill programs have been enormously successful, enabling millions of veterans to afford college educations. In recent years, however, evidence has emerged that certain aspects of the system are vulnerable to abuse from overly aggressive educational institutions.
In particular, for-profit colleges such as DeVry and the University of Phoenix have been implicated in scandals involving aggressive recruiting tactics among servicemembers at military bases. A PBS "Frontline" exposé in 2012 described the extent of the problem in detail, noting that some recruiters went so far as to attempt to enroll soldiers still recovering from war wounds at Camp LeJeune in North Carolina.
The incentives for for-profit institutions to target veterans for their tuition money are obvious. Apart from the fact that veterans typically have little previous experience in higher education, their G.I. Bill tuition payments are allowed to count toward the 10 percent of revenue that for-profit colleges must collect from private sources. (Legislative attempts to amend this “90/10 rule” have thus far been unsuccessful.)
For-profit college recruitment efforts have been shown to be wildly successful. A study commissioned by Senator Tom Harkin found that one in every four Post-9/11 G.I. Bill dollars was going toward for-profit colleges, which tend to redirect far more of that revenue back to advertising and recruitment than traditional nonprofit institutions. Along with Senator Dick Durbin, Harkin introduced the POST Act, which would have restricted for-profit colleges’ use of federal veterans funds, but the bill died in committee. (Harkin retired from the Senate this year.)
Such recruitment trends would not necessarily be problematic, if outcomes for students enrolled at for-profit institutions were comparable to those at nonprofit schools. But a wealth of evidence, including work by TCF’s own Suzanne Mettler, has shown this is not the case. For instance, most for-profit colleges have little incentive to ensure that veterans progress toward graduation and make their student-loan payments on time. At some schools, both the loan default rate and the dropout rate are well above 50 percent.
On April 27, 2012, President Barack Obama issued Executive Order 13607: Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members.
What It Does
EO 13607 is designed to protect veterans from predatory higher education practices through new federal guidelines regarding veterans’ education, as well as stricter enforcement of existing rules.
The order reinforces and strengthens several provisions related to veterans and current members of the military who are enrolled in higher education, in the form of several “Principles of Excellence.” Following EO 13607, educational institutions must:
- Allow prospective students with military affiliation to compare financial aid across institutions by personally informing them of the cost of their education, the amount that federal programs will assist in paying, other available financial aid, and the estimated debt they will incur as a result of their enrollment (“Know Before You Owe”).
- Desist from “unduly aggressive recruiting techniques” directed at veterans and active-duty members, including financial incentives based on the number of students whom recruiters can attract. EO 13607 also restricts recruitment on military installations to those educational institutions that have already signed agreements with the federal government pursuant to EO 13607.
- Permit military-affiliated students to leave an institution for military service and be readmitted upon return, as well as provide refunds for unused tuition in certain situations upon request, in compliance with existing Department of Education regulations.
- Provide proactive guidance for military-affiliated students that keeps them informed of their progress toward graduation via a designated campus “point of contact.”
- Report “veteran student outcome measures” to the Department of Education so that potential students have a means of comparing the quality of programming for veterans among different schools.
EO 13607 uses several mechanisms to enforce the provisions outlined above including:
- agreements between the federal government and institutions participating in military tuition reimbursement programs;
- amendments to Title 34 of the Code of Federal Regulations, which governs practices among educational institutions;
- the Department of Education College Navigator website (to report “outcome measures”);
- the Department of Veterans Affair's eBenefits website (for financial aid documents);
- existing education counseling programs at the Department of Defense and Veterans Affairs; and
- a “centralized complaint system,” coordinated between Veterans Affairs and State Approving Agencies, that allows military-affiliated students to report violations of EO 13607.
As of October 2013, per a report from the Veterans Benefits Administration, the following steps have been taken:
- The Department of Education established its “College Scorecard” website, which allows prospective students to compare borrowing costs, loan-default rates, and graduation rates across universities.
- The G.I. Bill website now includes the Department of Education College Navigator search engine.
- A contract was signed for the construction of the Veterans Complaint System of Record Notice.
- Universities committed to the Principles of Excellence are now required to provide military-affiliated prospective students with a “Financial Aid Shopping Sheet” that outlines the costs the student will incur while enrolled.
- Criteria for “veteran student outcome measures” have been discussed but not finalized.
- “G.I. Bill” is now a registered trademark, which will prevent against abusive websites that direct veterans to for-profit colleges while masquerading as government information portals.
While it is too soon to gauge the order’s effectiveness in improving educational outcomes for veterans, response from the higher education community has been encouraging. To date, over 6,000 educational institutions have agreed to adhere to the Principles of Excellence. The agreements can usually be found on university websites, such as this one from Portland State University.
Public reaction has been limited mostly to veterans and education organizations, and has generally been positive.
- In May 2012, Ryan Gallucci, the deputy director of the Veterans of Foreign Wars (VFW) National Legislative Service, testified before the House of Representatives Veterans Affairs Subcommittee. The VFW’s stance on EO 13607 is strongly supportive, though Gallucci acknowledged that “executive action, by nature, can be very limited in scope” and called for congressional action to strengthen the president’s plan.
- Vietnam Veterans of America (VVA) special advisor Joe Wynn announced his organization’s support for EO 13607, but noted that the core remaining problem is the 90/10 rule, by which hundreds of millions of federal-aid dollars are directed to for-profit colleges in the first place.
- Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers (AACRAO), praised the executive order but reiterated the same point as VVA: congressional reform of the “90/10 rule” should be swift and immediate, calling it “the single most effective legislative amendment” possible. (Nassirian suggested a still-generous “80/20 rule” instead.)
- The National Association of College and University Business Officers (NACUBO) supports the general goals of EO 13607, but expressed concern about the vagueness of some provisions, which could pose difficulties for educational institutions. In particular, the provision that institutions must personally inform students of their estimated aid before enrollment is difficult in light of the fact that many students only fill out federal financial-aid forms after their first semester has already begun. NACUBO also noted that Veterans Affairs has been hesitant in the past to share relevant aid-eligibility information with universities, potentially impacting the advisory role that EO 13607 requires of them.
- RAND Corporation did not take a specific position on EO 13607 itself, but cited a study it conducted, with the American Council on Education, of veterans’ satisfaction with their experiences in higher education. Rather than the alarming portrayal of veterans’ entrapment in for-profit colleges, the RAND survey found that the satisfaction level of veterans in such institutions was only slightly below those in traditional nonprofit universities.
- Association of Private Sector Colleges and Universities (APSCU) was, unsurprisingly, the only organization to directly criticize the executive order. President Steve Gunderson, a former congressman, said APSCU supported the idea of a centralized complaint system but feared that it would become “a conduit for politically motivated attacks . . . by those who are intent to destroy the reputation of any institution.” He went on to call the more liberal refund policy in EO 13607 “an increased cost and administrative burden” and “inconsistent with our existing refund procedures.” More generally, APSCU believes that the existing regulations related to for-profit institutions are sufficient, as they are already “one of the most highly regulated groups in the country.”
Higher education in the United States was once the preserve of a relatively small group of Americans. Yet, as the country continues its half-century-long transition to a postindustrial economy, more than ever U.S. jobs demand the skills and education that a bachelor’s degree provides. Since the end of World War II, the proportion of the population with a college education has increased sixfold, according to the Census Bureau.
As the proportion of Americans with a college education has increased, however, so too has the price of a degree. Even when adjusted for inflation, the annual tuition, room, and board for an undergraduate at a four-year university has increased 240 percent. Public institutions—which educate the vast majority of university students in the United States—have seen the greatest increases.
In the long run, statistics consistently show that a college education is very much “worth it,” from a financial perspective—lifetime earnings of Americans with a bachelor’s degree have for decades been 50 to 100 percent greater than those of their peers with just a high-school diploma.
Yet these simultaneous trends—the ever-greater appeal of attending college, and the ever-greater cost of doing so—have caused an explosion in the amount and prevalence of student debt. As recently as the early 1990s, the average student graduated college with just $15,000 in debt, adjusted for inflation. Today, that figure has surpassed $30,000 and is inching closer to $35,000. At the same time, the proportion of students graduating with loans has increased 55 percent.
Federal action on the issue has been haphazard.
Though the maximum Pell Grant is worth less in current dollars today than in the mid-1970s, Congress has enacted student loan-relief programs in recent years to ease the burden on Americans who are already in debt as a result of a university education. The first, known as the Income-Based Repayment (IBR) initiative, was signed into law by President George W. Bush as part of the 2007 College Cost Reduction and Access Act. IBR allows debtors to limit their payments to 15 percent of discretionary income without penalty, and to retire loans for which payments have been consistently made over twenty-five years.
The Pay As You Earn (PAYE) initiative, which was enacted in 2010 as part of the Health Care and Education Reconciliation Act (HCERA), improved on the precedent set by IBR. PAYE’s provisions, which reduce the cap on payments to 10 percent of discretionary income and the loan-retirement term to twenty years, took effect in 2014.
As helpful as these initiatives have been, they remain severely underused among those who qualify for them, and as such are the target of these memoranda.
To help students manage the burden of their higher education debt, President Barack Obama issued two presidential memoranda. On June 7, 2012, he issued Improving Repayment Options for Federal Student Loan Borrowers, and on June 9, 2014, he issued Helping Struggling Federal Student Loan Borrowers Manage Their Debt.
What They Do
The memoranda simplify and promote the process by which students with federally issued and federally guaranteed loans can take advantage of programs that reduce repayment obligations. They direct various agencies of the federal government to establish outreach efforts, websites, and other notification procedures to ensure that the programs are used by qualified students.
With regard to these programs, the 2012 memorandum requires that the Department of Education:
- allow students applying for IBR aid to provide income verification via a website (previously, applicants had to provide a signed copy of their tax return to Department of Education);
- create a centralized Internet resource that explains federal loan-aid options on a personalized basis, using information on students’ “individual circumstances”; and
- develop a “model exit counseling module” that eventually can be replicated at individual educational institutions, which will inform graduating students of the federal loan-aid options.
The 2014 memorandum expands on the 2012 one by asking that the Department of Education:
- issue regulations to expand PAYE to cover debtors who had borrowed before 2008 and still held loans after 2011, who are currently subject to the more stringent pre-HCERA IBR repayment rules, and specifically target “borrowers who would otherwise struggle to repay their loans” (the secretary of education is to issue the regulations by the end of 2015);
- develop “targeted strategies” that will inform the maximum possible number of qualified students of the PAYE program, while using “data analytics” to determine which groups of students are currently the least informed;
- work with private sector tax-preparation companies to spread awareness of IBR and PAYE; and
- convene experts to develop more effective loan-counseling strategies, including but not limited to the current Department of Education Financial Awareness Counseling Tool.
While at the moment it is unclear whether IBR income verification can be submitted online, the memoranda have led to some positive developments:
Studentloans.gov, which was created in 2010, now includes comprehensive information comparing and contrasting the financial terms of existing loan-relief programs.
TurboTax and H&R Block software now include “banners” that direct taxpayers to the Department of Education’s Repayment Estimator, which is designed to guide debtors toward IBR and PAYE, if they qualify.
The Department of Education has begun the rulemaking process for the expansion of PAYE eligibility. Two public hearings were held, one on October 23, 2014, in Washington, and the other on November 4 in Anaheim. The first rulemaking session took place at the Department of Education February 24–26, with two more meetings scheduled for March 31–April 2, and April 28–30. According to the Obama administration’s proposed budget, the expansion is estimated to cost $9 billion.
The proximate impact of the student loan memoranda is difficult to attribute to any one executive action, but the short-term increase in IBR and PAYE enrollment has been remarkable:
- IBR enrollment more than doubled, from 910,000 in the third quarter of 2013 to 2.07 million in the first quarter of 2015.
- PAYE enrollment increased over tenfold, from 40,000 in the third quarter of 2013 to 410,000 in the first quarter of 2015.
- As a share of total student loans currently in repayment, IBR and PAYE participants increased from 6 percent in the third quarter of 2013 to 10.5 percent in the third quarter of 2014, and is now almost certainly higher, according to the New America Foundation.
Public reaction has focused mostly on the expansion of PAYE eligibility, and has been generally but not universally positive.
- The Institute for College Access and Success (TICAS) submitted a report to the Department of Education on February 18, 2015, recommending a series of reforms as part of the PAYE expansion. As with Obama’s memorandum, chief among these is ending the restriction regarding the date on which the student entered into debt as a qualification for PAYE eligibility. However, the TICAS proposals go further, including suggestions such as eliminating the need to prove a “partial financial hardship” to qualify, removing interest capitalization for PAYE loans, and closing the loophole that allows debtors to exclude their spouse’s income from their eligibility reporting if they file taxes separately.
Meanwhile, two notable criticisms include:
- As Alan Pyke at Think Progress has noted, the number of federal borrowers in loan trouble increased during the same period when IBR and PAYE enrollment was increasing. The number of people holding federally issued student loans who entered into default increased from 2.1 million in the third quarter of 2013 to 2.9 million in the first quarter of 2015. The number of borrowers considered delinquent (more than 361 days of nonpayment) increased from 2.47 million in the third quarter of 2013 to 2.92 million in the first quarter of 2015.
- As noted by the New York Times Upshot blog, PAYE participants that have an average or below-average amount of debt would actually owe more over the long term than a student using the Standard Payment Plan. Additionally, there is the issue that the current tax code would likely count the unpaid amount of the loan after twenty years as a “gift” included in gross taxable income, meaning students would be hit with a hefty tax bill twenty years after they first started paying off their loans.
The Obama administration’s efforts to arrest climate change currently have the priority of reducing carbon and other greenhouse gas emissions through the Environmental Protection Agency’s Clean Power Plan and automobile fuel efficiency standards, and through international diplomacy leading up to the Paris climate talks in December. The fact is, however, that mitigation can only go so far—historical greenhouse gas concentrations mean that some climate change effects will be unavoidable and, indeed, are already occurring.
We are already seeing the impact of climate change around the world, and the administration realizes that some of its assistance programs could have their success put at risk by the various impacts of climate change. To that end, the administration wants to ensure that its aid and development programs take climate change into account in allocating funds and approving projects. The administration also realizes that it must work with partner nations to ensure that their own assistance programs do the same, and that—specifically in the case of vulnerable developing world nations—their economic development plans take into account how climate change will affect their own natural resource endowments. (For example, how glacial melt in the Himalayas might affect farming and hydroelectric power generation in India and Pakistan.)
Measuring the impact of climate change on development projects is no less critical for the international financial institutions in which the United States is a major shareholder, especially the World Bank and the International Monetary Fund. When the World Bank funds an infrastructure program overseas, for example, the administration wants assurance that the program has been thoroughly vetted to consider present and future climate change risk. If a specific highway program goes up along a country’s coast, to what extent will that highway be affected by future sea level rise? How reliant is an agricultural irrigation program on the predictability of seasonal rainfall, which may shift with rising global temperatures?
The bottom line is that the administration recognizes that Americans want to feel confident that their tax dollars are being invested wisely in projects that a low-risk with regard to climate change impacts.
On September 23, 2014, President Barack Obama issued Executive Order 13677: Climate-Resilient International Development.
What It Does
Executive Order 13677 requires that all international aid and development programs that the United States runs or is involved in through international institutions take into account the current effects and anticipated future impacts of climate change in designing, implementing, and evaluating assistance programs. The order requires sound climate risk-management planning for the programs it funds. It is establishes a Working Group co-chaired by the secretary of the treasury and the administrator of the U.S. Agency for International Development (USAID) to oversee an interagency process designed to build strategies and best practices for identifying and reducing climate risk in U.S. development assistance.
One real-world application of this order would be requiring USAID to consider how sea-level rise and increasing intrusion of saltwater from the Bay of Bengal into river systems in Bangladesh would affect its crop assistance programs to Bangladeshi farmers, mandating, for example, investments into saline-resistant rice seeds.
Executive Order 13677 directs the Treasury- and USAID-led Working Group to establish a two-year timeline to implement strategies for relevant departments, with specific intermediate milestones for its members. The reporting stage is divided into two sections: one for agencies with “direct international development programs and investments,” and another for agencies that participate in “multilateral entities.” The first six-month interval expired in March 2015; it remains to be seen if any deliberations or updates will be made public.
Until the report of the Treasury-USAID Working Group is released, it is too soon to tell what specific impact the order is having on current operations. To some extent, the order codifies what USAID has already been doing in the field, as well as providing uniform guidance for how the Treasury Department judges how the United States is participating in international development institutions (such as the World Bank).
Most commentary on the order has been positive, giving the Obama administration credit for prominently underscoring the importance of using a resilience lens to view the sustainability of aid and assistance programs, even if the order only reinforces a lot of action that was already happening at the department level.
- Grist’s Ben Adler writes that the order will have the most impact in the wider context of the administration’s actions on climate change: “environmentalists are unanimous in praising the executive order. But they are also underwhelmed, and are calling for more action on funding climate mitigation and adaptation efforts in the developing world.”
- Lisa Goddard, director of the International Research Institute for Climate and Society at Columbia University, wrote positively about the order, especially highlighting its efforts at sharing U.S. technical and scientific data with developing world nations: “The approach it lays out has already been tested. It is working in some of the most impoverished areas of the world to increase food security, decrease vulnerability to disasters and predict outbreaks of diseases such as malaria. It leverages and adds value to existing capacities—from satellites to super computers—and it can build on other recent campaigns that have mobilized science to eradicate poverty, hunger and disease.”
- An unsigned Reason blog post on the order reprinted an extract, adding the title “Obama Announces Climate Change Executive Order: Bow down! The philosopher king knows best!” with no additional commentary, evidently as part of a more general criticism of executive orders. This criticism is proffered despite the fact that EO 13677 does not require additional congressional appropriations or oversight of internal guidelines for executive agencies and departments.
Climate change is a challenge that will affect the politics and economics of the twenty-first century in profound ways. It is necessary for the United States, the world’s largest per capita emitter of carbon emissions, to transition to low- and zero-carbon energy infrastructure. But it is just as important for the developing world, particularly India and China (the latter being the world’s largest emitter absolute terms), to be successful in balancing economic growth with climate and environmental concerns.
The main multilateral process for global action against climate change is the United Nations Framework Convention on Climate Change (UNFCCC). The initial treaty mandating emissions cuts by the developed world, the 1997 Kyoto Protocol, floundered, as the United States refused to ratify the treaty, citing the exclusion of developing world countries such as India and China. In 2009, the international community tried again in Copenhagen, but again an agreement could not be reached owing to disagreements between developed and developing world countries on legally binding emissions cuts.
Given this international context, and the Obama administration’s desire nevertheless to come to achieve a robust international agreement that has every nation committing to at least some kind of action to fight climate change, the president has tried to build bilateral cooperation with major nations. The culmination of these efforts will serve as an adjunct to the UNFCCC, which will convene in Paris in 2015 to build a final agreement.
During a November 11, 2014, summit between President Barack Obama and President Xi Jinping of China, the two leaders made the U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation.
What It Does
The U.S.-China Joint Announcement attempts to advance momentum before the UNFCCC convening in Paris by bringing together pledges from the United States and China to take action on several climate change and clean energy priorities, both individually and on a bilateral basis. The president used the authority of his office, with the inherent power to enter into executive agreements with other nations that are not subject to the advice and consent of the U.S. Senate, to make the agreement, which is not a formal treaty and is not legally binding.
The announcement contains two main components. The first is a series of reciprocal pledges made by both the United States and China; the second is joint cooperation on specific projects to expand cooperation between the two countries. For the United States, it promises to reduce emissions 26–28 percent from 2005 levels by 2025. For China, it promises to “peak” its CO2 emissions by 2030 and double the amount of non-fossil fuel electricity generation to 20 percent by the same year.
Additionally, the United States and China are committed to broadening the cooperation on clean energy that has been fostered already during much of the Obama administration’s tenure.
Many of the projects related to the U.S.-China Joint Announcement are ongoing, and others, such as the plans for emissions reductions (for the United States) and a peak emissions year (China), will be formalized as part of each nation’s Intended Nationally Determined Contribution (INDC). These INDCs were due to be submitted to the UNFCCC during the spring of 2015 and will be bound together into an ambitious agreement at the Paris meeting.
The specific clean energy cooperation programs include:
- Extending the U.S.-China Clean Energy Research Center (CERC) mandate for five years (2016–2020), with renewed funding for efficient buildings, clean vehicles, and advanced coal technologies, as well as a new project on the important relationship between energy generation and water usage.
- Starting a major carbon capture and storage project in China, with a mix of funding from China, the United States, and the private sector.
- Renewing momentum from a previous U.S.-China agreement to phase down the production of hydrofluorocarbons, a potent greenhouse gas.
- Establishing a Climate-Smart/Low-Carbon Cities initiative under the U.S.-China Climate Change Working Group to expand on planning, policies, and use of technologies for sustainable, resilient, low-carbon growth, beginning with a summit meeting where representatives of cities from both countries can come together to share strategies.
- Planning a series of trade missions to discuss sustainable urbanization and technology transfer opportunities.
- Expanding bilateral cooperation on “smart grids” that work seamlessly with a variety of renewable energy sources.
While much of the specific target-dates are far into the future, the agreement is arguably having an impact now. China and the United States have been deploying more renewable energy year-on-year, and that trend is likely to continue, thanks to many of the provisions of this deal. The agreement has also raised optimism that Paris will be a success now that the United States and China are taking such a prominent leadership role. India—which, like China, had been reluctant to commit itself to specific actions to fight climate change—is now also sounding more cooperative.
- Grist’s Ben Adler called the agreement a “game-changer” and cited its potential to galvanize action around Paris by other countries. He defends the agreement against criticisms that say it lets China off the hook by not asking for emissions cuts sooner, acknowledging that the United States carries a burden of historic contribution to climate change and that the Chinese should have more leeway to prioritize economic growth.
- Simon Hansen, writing in The Guardian, says the climate agreement reverses a lot of the negative momentum that had come out of the 2009 Copenhagen negotiations. Hansen cited Chinese recognition that its pollution problem was a political liability domestically.
- Washington Post’s Robert Samuelson was more skeptical of the agreement, saying that the specific targets under consideration were too ambitious to be realized in the offered time frame. He also emphasized that the agreement was non-binding and entirely voluntary—a future administration in either the United States or China could back out of the agreement without penalty.
As the world’s largest economy, the United States has an important role to play in ensuring the world meets its goals for reducing greenhouse gas emissions. While progress toward setting targets and lowering the nation’s emissions have been made in the transportation sector, prior to 2014, there was no concerted effort by the federal government to limit carbon emissions from power plants.
As a result, the electric power sector currently is responsible for about 40 percent of the carbon dioxide emissions in the United States. And as the U.S. economy continues to recover from recession, it is expected that emissions from the electric power sector will rise.
A congressional effort to create a national cap-and-trade regime—the American Clean Energy and Security Act of 2009, or the Waxman-Markey bill—passed in the House of Representatives but failed in the Senate.
On June 2, 2014, the Environmental Protection Agency (EPA) issued its proposed rule, Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan).
What It Does
The Clean Power Plan provides emissions reductions guidelines for the fifty U.S. states (a supplemental proposal was issued on October 28, 2014 to cover U.S. territories and “Indian country”). The Clean Power Plan is based on authority granted to the EPA by the Clean Air Act to regulate pollutants, reinforced in the Supreme Court case Massachusetts v. EPA, which ruled that the EPA was required by the provisions of the Clean Air Act to regulate greenhouse gas emissions in the same fashion in which they regulate other types of air pollution, including smog and particulate matter.
The Clean Power Plan targets nationwide CO2 reductions of 30 percent below the 2005 baseline by 2030. The goals and mechanisms of the plan are divided into two broad parts: (1) setting state-specific emission rate-based goals and (2) providing EPA guidance to states on the creation and execution of state plans to meet those goals.
To establish state-specific goals, the EPA looked at the current electricity mix of each state, including efforts each is currently making to reduce emissions by adding for renewable energy or encouraging efficiency. The EPA then calculated how much each state could reduce its emissions in a cost-effective way by 2030. Thus, each state has different goals, with the aggregate nationwide goal being the 30 percent below the 2005 baseline by 2030.
The second part of the Clean Power Plan lets each state decide the best way to conceive of their emissions reductions. The EPA stresses flexibility in allowing each state to adopt and execute, in coordination with the EPA, its own compliance plan to reduce emissions. In an effort to assuage the utility sector, the EPA stipulated that it would not put the onus on individual companies operating in a state to meet that state’s emissions goals, but rather would take into account the actions of authorities statewide in mandating action. Not only can a state adopt a plan suited to its own circumstances, but also each is encouraged to combine efforts with other states to maximize efficiency and pool resources.
The Clean Power Plan is not yet in its final stage. While the EPA has issued its proposed rule, the final rule is not due until July 2015. After the issuance of the final rule, states will have one year to submit compliance plans (or request a one- to two-year extension). The EPA will then work with individual states on their compliance plans. The compliance period for those state plans, or the federal plan in case states do not submit their own, will formally begin in summer 2020.
Impact will be difficult to judge with certainty until after the compliance period formally commences in 2020. However, most analysis of the Clean Power Plan suggest that it will lead to the decline of coal in the U.S. energy mix and an increase in natural gas, renewables, and plans to increase economic efficiency.
The EPA estimates that the Clean Power Plan will lead to numerous health and economic benefits that more than make up for the projected costs associated with the requirements of individual plans. By its own calculations, the health benefits alone will be $55 billion to $93 billion in 2030, preventing 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in children.
Environmental research and advocacy groups, such as the Natural Resources Defense Council (NRDC), Sierra Club, and World Resources Institute (WRI), applauded the Clean Power Plan.
- Many have said, as the NRDC said in their formal comments on the plan, that the EPA actually did not go far enough in requiring more stringent reductions, which they said could be accomplished while incurring the same costs as the current EPA proposal.
- The Sierra Club says the Clean Power Plan “gives us a framework to make significant progress in the states” when it comes to emissions reductions and sends a signal to the world that the United States is serious about tackling climate change.
- WRI analysts Michael Obeiter and Kevin Kennedy lauded the plan’s flexibility and potential economic benefits, saying it will spur the adoption of energy efficiency and renewable energy countrywide.
Conservative and business groups were more pessimistic.
- Three lawsuits have already been filed against the plan.
- The North American Electric Reliability Corporation released a report saying the changes wrought by the Clean Power Plan might disrupt the U.S. electrical supply, as transitioning from the steady generation of fossil fuel sources to more intermittent renewables may strain the traditional grid infrastructure.
- Several carbon-intensive manufacturing groups expressed their worry that if the electricity sector could not deliver on planned emissions cuts, the EPA would come after them next.
Many states have also filed lawsuits challenging the scope of the Clean Power Plan as beyond its legal foundations within the Clean Air Act. It remains to be seen whether the disposition of those court cases delays in any way the rulemaking process or the submission of state compliance plans.
The OPEC oil embargo of 1973 hit the U.S. economy and consumers’ pocketbooks particularly hard. In response, Congress enacted in 1975 the first Corporate Average Fuel Economy (CAFE) standards for passenger vehicles as one step in the nation’s journey to reduce dependence on what was then mostly imported oil. Deemed successful in both improving fuel efficiency and reducing greenhouse gases by the National Research Council’s exhaustive study, the standards were updated in 2007.
With the transportation sector currently producing about a third of U.S. carbon dioxide emissions, and American households still spending an average of $2,000 per year on gasoline, improving fuel efficiency is of utmost importance.
On May 19, 2009, in order to lower emissions in the automobile sector, President Barack Obama announced the creation of a National Fuel Efficiency Policy, and directed the Environmental Protection Agency (EPA) and Department of Transportation to work with stakeholders from the states and private industry to develop a rule that would set more stringent national standards for emissions from the U.S. passenger automobile fleet.
In response, the EPA and the Department of Transportation issued on May 7, 2010, a final rule: Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards.
What It Does
Both the EPA and the Department of Transportation executed separate parts of the rule, depending on their individual statutory authority. The EPA used the Clean Air Act to justify its actions in setting carbon emission standards for light-duty vehicles; the Department of Transportation’s National Highway Traffic Safety Administration adopted its standards for passenger cars and light trucks under 42 U.S.C. 6201 (The Energy Policy and Conservation Act) and 49 U.S.C. 32902 (Average Fuel Economy Standards).
Taken together, the actions by the EPA and Department of Transportation set emissions standards for manufacturers of passenger cars, light-duty trucks, and medium-duty passenger vehicles in the United States for years 2012 to 2016. The rule requires that an average fuel economy standard of 35.5 miles per gallon (mpg) be reached by 2016, and, for the first time, explicitly targets carbon emissions, as well as other airborne pollutants.
This new rule is meant to streamline the process by having both the EPA and Department of Transportation work together, along with states such as California, which, due to size of population and number of vehicles on the road has an outsized impact on the vehicle fleet. This is intended as an efficient move for manufacturers, since they would only have to comply with one set of standards to sell their vehicle fleet nationwide. Additionally, while the EPA and Department of Transportation gauge their measurements by the emissions footprint of individual vehicles, the rule indicates they will fix the average so that the overall entire car fleet needs to be more efficient, but not necessarily each and every model by the same proportion.
The rule relies on automotive companies expanding their use of already existing technologies in the manufacture of their vehicle fleet, including:
- engine, transmission, and tire improvements;
- increased use of stop-start technology; and
- increased use of hybrid and electrical vehicle technologies, including increasing commercial sales of hybrid and plug-in electric vehicles.
Manufacturers can be penalized for noncompliance. According to the text of the final rule:
- The penalty, as adjusted for inflation by law, is $5.50 for each tenth of a mpg that a manufacturer’s average fuel economy falls short of the standard for a given model year multiplied by the total volume of those vehicles in the affected fleet (i.e., import or domestic passenger car, or light truck), manufactured for that model year.
The rule was finalized on May 7, 2010, officially going into effect on July 6, 2010. In 2011, the Obama administration worked with large automakers to agree to another step-up in efficiency standards (54.5 mpg by 2025 model year).
Many auto manufacturers have expanded their offerings of hybrid and electric vehicles, responding not only to the mandates of the fuel standards, but also consumer choice about driving environmentally friendly cars.
The auto industry has been broadly cooperative in their compliance with the fuel standards. According to the Department of Transportation, total fleet fuel economy in 2014 was 31.6 mpg, up from 27.1 mpg in 2008, meaning the industry is broadly on pace to meeting the 35.5 mpg goal for 2016.
In its Manufacturer Performance Report for the 2012 model year, the EPA demonstrated that automakers were, for the most part, able to actually beat the standards. Automakers recorded the second largest year-on-year increase in overall fuel economy, and overall greenhouse gas performance was “9.8 grams of GHG/mile better than what the 2012 standards required.” Automakers have also responded in their designs: according to the EPA, there were seven times as many cars that got 40 mpg as there were in 2009.
Car manufacturers worked with the Obama administration on the rules and were publicly supportive of them, citing the fact that one cohesive national standard would make the rules less onerous than having to deal with standards set by multiple states.
- GM CEO Fritz Henderson was quoted in the Christian Science Monitor, saying “Energy security and climate change are national priorities that require federal leadership, and the president's direction makes sense for the country and the industry. GM and the auto industry benefit by having more consistency and certainty to guide our product plans.”
- Grist’s Michael Livermore lauded the new rules, calling the standards “bold” and saying they would save oil and reduce carbon emissions from American cars. He also predicted the standards would put pressure on Congress to act further on climate change priorities, including the ultimately unsuccessful Waxman-Markey cap-and-trade bill.
- An article in the British-based magazine The Economist said the new CAFE standards would work to shift consumer preference away from the least-fuel efficient models, the rule lets light trucks off the hook, and is less efficient than raising the gas tax or instituting an economy-wide carbon tax.
- The CATO Institute’s Randall O’Toole was mildly critical of the standards, saying that if the government feels the need to introduce more fuel-efficient cars, this is the least-worst method of doing so, since it does not bar anyone from buying a gas-guzzling SUV—it merely raises the cost of doing so.
Reducing greenhouse gas emissions across the United States is an essential part of preventing the worst effects of climate change. While the Obama administration is trying to make wholesale economy-wide changes (for example, through the Clean Power Plan), it is also important to lead by example.
The federal government is the single largest energy user in the country; taking steps to reduce its own emissions footprint demonstrates a commitment to practice what it preaches. In addition to reducing its greenhouse gas emissions footprint, installing additional renewable energy generation can save the American taxpayer money over the long-term and spur further investment by the private sector, especially by companies that anticipate the federal government will be a regular customer.
On March 19, 2015, President Barack Obama signed Executive Order 13693: Planning for Federal Sustainability in the Next Decade.
What It Does
The order instructs the executive branch to implement a plan to reduce its emissions 40 percent over the next decade (by fiscal year 2025, using a fiscal year 2008 baseline) and receive no less than 30 percent of its electric energy for buildings from renewable sources by the same deadline. The president also directed federal departments and agencies to partner with private sector contractors, who will put forth their own voluntary emissions pledges. The White House will track success of these pledges publicly and will use its relationship with federal contractors to encourage more ambitious action.
The top-line policy goals set by the administration are designed to unfold across a series of incremental targets from now until 2025. In order to improve environmental performance and sustainability over the next decade, the federal government is targeting 40 percent reduction in greenhouse gas emissions by fiscal year 2025 (versus a fiscal year 2008 deadline) and a 30 percent target for the deployment of renewable energy for building electricity (also by the same deadline). Separate federal agencies and departments will submit their targets to the White House by ninety days after the date of the order.
Subsequent to the plan submission, beginning in fiscal year 2016, the head of each agency will begin taking steps to meet the following goals, “where life-cycle cost-effective”:
Reduce energy intensity (energy unit per unit of gross domestic product) 2.5 percent annually until FY 2025 through a variety of efficiency measures, improving reporting benchmarks for energy use to increase transparency, and ensuring agency data centers are energy-efficient.
Ensure that by FY 2025, no less than 25 percent of building electric energy and thermal energy shall be clean energy (total non-fossil fuel, including renewables and alternative energy sources). This will be achieved through the installation of onsite renewable electricity generation (for example, the existing solar panels on the roof of the Department of Energy) and the purchase of renewable energy certificates.
Reduce water intensity 36 percent by fiscal year 2025 (versus a fiscal year 2007 baseline) through efficiency programs, smarter metering, and introducing waste and stormwater management programs.
Reduce per-mile greenhouse gas (GHG) emissions from vehicles operated by the federal government by 30 percent from 2014 levels by fiscal year 2025.
Encourage the use of zero emission/plug-in hybrid electric vehicles.
Improve supply chain management of greenhouse gas emissions by compiling, beginning thirty days after the order, an inventory of federal suppliers that indicates whether they have disclosed greenhouse gas emissions data and whether they have developed plans for reducing those emissions. Federal contracting agencies may then begin to use that data in considering how companies who wish to participate in federal procurement are meeting those goals and may develop plans for encouraging federal contractors to meet or exceed their reduction plans.
The just-issued executive order gives agencies and departments ninety days to propose its office-specific targets to the White House via the chair of the Council on Environmental Quality (CEQ) and the director of the Office of Management and Budget (OMB). Some of the private-sector federal suppliers who have offered voluntary emissions reductions targets of their own have, in many cases, already disclosed their emissions profile, as well as their own targets for reduction, which are publicly listed on the White House webpage, Federal Supplier Greenhouse Gas Management Scorecard.
While federal government departments and agencies will likely submit their plans to the CEQ/OMB closer to the 90-day deadline, many of the private-sector partners have already announced their emissions reductions targets, as shown on the White House scorecard. Changes in federal procurement may actually be happening already, since federal agencies know that targets starting in 2016 will have to be reflected in purchases being made now.
- The NRDC’s Susan Casey-Lefkowitz called the order “important” and “ambitious” and lauded the president for leading on this issue at a time when Congress was reluctant to commit to accelerating the development of clean energy. Casey-Lefkowitz said the order went hand-in-hand with the new EPA rules and the voluntary targets set by private sector actors.
- ThinkProgress’ Ryan Koronowski was similarly positive about the executive order, citing its projected $18 billion in cost savings to American taxpayers. Koronowski was disappointed, however, that the rule did not address the extraction of fossil fuel resources from federal lands, which, when they are burned for energy, are a significant contributor to greenhouse gas emissions.
- Vox’s Brad Plumer was also supportive, though he emphasized that the greater impact of the executive order will be in “greening” the federal procurement supply chain. While the federal government directly produces only about 0.4 percent of carbon dioxide emissions, it is the government purchase of goods from the private sector that should have a bigger impact. With the changes to procurement rules from this order, the federal government will be buying more hybrids and electric vehicles, smart meters, resource management technology, and energy generated from solar panels and wind turbines—purchasing decisions that will benefit American manufacturers and bring the overall cost of these technologies down.
The American energy landscape has been remade in the past half-dozen years, thanks to newer methods of reaching oil and gas reserves that older, more traditional technologies could not reach. Chief among those is hydraulic fracturing (“fracking”), the use of chemicals and high-pressure water to break through rock to access oil and natural gas.
With the proliferation of fracked wells throughout the United States, there has been concern about the use and disposal of chemicals involved, and their potential impact on the water table near the wells. Many states have regulated how fracking companies can operate, but to date there is no federal standard that applies to fracked wells.
On March 26, 2015, the Department of the Interior, Bureau of Land Management (BLM), issued a Final Rule: Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands.
What It Does
The final rule requires companies that operate fracking wells on federal and Native American-owned lands to meet minimum health and environmental standards, including safer storage of post-drilling wastewater, and requires some disclosure of chemicals used.
By statute, the BLM, through the 1975 Federal Land Policy and Management Act, is responsible for managing the multiple uses of federal land, and can issue regulations in support of that objective. The BLM recognized that the expanded technologies used in today’s drilling necessitate an update of outdated oil and gas drilling regulations that were last revised thirty years ago.
The rule focuses on three broad categories:
1. proper well construction,
2. responsible management of flowback fluid, and
3. public disclosure of chemicals used in the fracking process.
The rule requires operators to:
- submit to the BLM relevant information about fracking proposals, including proposed locations of fractures and location of wells relative to water sources;
- ensure cement encasements are built according to the highest standards;
- perform integrity tests on wells prior to drilling, rather than after as current regulations allow;
- store any recovered fluids in enclosed or covered storage (that is, no open air storage, which previous regulations allowed);
- disclose chemicals used in the fracking process, except where application through affidavit a company declares them to be trade secret; and
- ensure these standards are met for all wells, not just selected sample wells.
The rules also strive to publicly identify areas where fracking has occurred and works with states and tribal authorities to “coordinate standards and processes” in order to maximize efficiency of effort and resources.
The rules go into effect ninety days from the publication of the rule in the Federal Register (March 26, 2015). The BLM plans to reassess the rule’s adequacy after seven years of implementation.
By the BLM’s own analysis, the rule applies to the nearly 36 million acres of federal land under lease of oil and gas development, containing 95,000 active oil and gas wells.
The rule has not yet made an impact on the drilling itself, though companies behind the scenes may be preparing to update their internal procedures to match the federal standards, where applicable.
While federal lands only represent a small portion of overall oil and natural gas extraction, federal rules could set the standard for states that choose to issue their own rules, if they have not done so already.
Members of the oil and gas industry as well as many Republicans in Congress reacted strongly against the rule, threatening both legal challenges and legislation, respectively, to roll them back.
As soon as the rule was published, reports the Washington Examiner, the Independent Petroleum Association of America and the Western Energy Alliance filed a lawsuit in federal court, saying that concerns about the health and environmental consequences of fracking were “unsubstantiated.” The same Examiner story quoted committee staffers as saying they had received feedback from Native American tribes concerned that the new regulations would starve them of revenue from oil and gas development on their land.
The U.S. Chamber of Commerce was also critical of the rule, saying that the administration wanted “to add another layer of bureaucracy on energy producers” and that the new regulations would make companies spend twice as much time on compliance (since they would need to harmonize their operations with both state and federal regulations).
A coalition of environmental groups were also critical of the rule—for not going far enough. Friends of the Earth, Greenpeace, the Center for Biological Diversity, and Environmental Action released a joint statement blasting the rule, arguing that fracking cannot be done safely on public lands at all and that the rule only advances the Obama administration’s wrong-footed “all-of-the-above energy strategy.”
Analysts at the Natural Resources Defense Council, while lauding the ban on open-air storage and requiring pre-drilling demonstration of well integrity (cement evaluation), said the rule was too pro-industry and was not as strict as some state standards that already exist. They said further that it only covers one kind of “well stimulation”—hydraulic fracturing—but not other, similarly dangerous methods, such as acid stimulation.
In support of the rule, Center for American Progress senior fellow David Hayes called the standards “common sense” and a “big step forward toward safer drilling practices” that will provide a good baseline for states to use nationwide.
The New Republic’s Rebecca Leber took a balanced view, saying that some parts of the rule were pro-industry (allowing companies to determine which of their chemical combinations are trade secrets), while some are victories for stewardship of public lands (tighter storage of wastewater).
Clean water is not only essential to human health and biodiversity, but it is an important component of many American businesses (agriculture and tourism, for example).
The Clean Water Act (1972) authorizes the Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (USACE) to prevent the pollution of the nation’s waterways, specifically waters with a “significant nexus” to “navigable waters.” It accomplishes this through a strict permitting process.
Under the Clean Water Act, all discharges (such as wastewater from an industrial plant) into regulated waterways are considered illegal unless a specific permit has been issued by the EPA or the USACE (under section 404).
In recent years, however, there has been some controversy over the definition of “significant nexus” to “navigable waters.” In 2006, the Supreme Court, in Rapanos v. United States, split over whether to mandate a more restrictive definition of “navigable waters.” Since then, there have been numerous calls for the EPA to clarify what its regulations are meant to cover.
On May 27, 2015, the EPA, in conjunction with the USACE, issued The Clean Water Rule: Definition of Waters of the United States (Final). The new rule ensures that “waters protected under the Clean Water Act are more precisely defined and predictably determined.”
What It Does
The rule clarifies what the EPA and USACE consider part of the system of navigable waterways for the purposes of permitting. Tributaries of navigable waterways “must show physical features of flowing water—a bed, bank, and ordinary high water mark” in order to fall under the relevant regulations. The rule also allows “nearby” waters to be covered, provided they are located within a specific, measurable distance: from a minimum of one hundred feet and within the one-hundred-year floodplain to a maximum of 1,500 feet of the ordinary high watermark.
The definition of “isolated” or “other” waters had, before this rule, been defined as “all other waters the use, degradation or destruction of which could affect interstate or foreign commerce.” As this was criticized for being overly broad, the EPA and USACE have provided a more specific definition. The Clean Water Act now specifically covers:
- prairie potholes, Carolina and Delmarva bays, pocosins, western vernal pools in California, and Texas coastal prairie wetlands when they have a significant nexus (that is, when they are likely to impact traditional navigable waterways); and
- waters with a significant nexus within the one-hundred-year floodplain of a traditional navigable water, interstate water, or the territorial seas, as well as waters with a significant nexus within 4,000 feet of jurisdictional waters.
The rule was published in the Federal Register on June 29, 2015, and went into effect on August 28, 2015.
The impact of the new rule is too soon to reliably gauge, but the Obama administration has said that it will improve the quality of drinking water for 117 million Americans. The rule will apply to about 60 percent of the country’s bodies of water. However, its impact will also be affected by the outcomes of several suits that states have brought against it. The full implementation of the rule, then, is not yet assured.
Columbia University’s Steven Cohen welcomed the new regulation, not only because the clarification will help protect the integrity of U.S. waterways, but because it will also remove a significant source of regulatory uncertainty for U.S. businesses. The pro-conservation group WaterKeeper Alliance took the opposite position, arguing that the rule was “weak” since it effectively narrows the criteria for saying that a body of water is under federal jurisdiction and since it maintains long-standing exemptions for certain agricultural businesses.
Business groups such as the American Farm Bureau Federation were not convinced by the EPA’s assurances that this rule clarification would not create a new regulatory burden; the group’s president also criticized the EPA for mounting an aggressive advocacy campaign during the comment period.
The rule was also criticized as regulatory overreach by congressional Republicans, who passed legislation through the Senate Environment and Public Works Committee to overturn it. That bill is now headed to the Senate floor, where it needs sixty votes to pass. Before the rule was finalized in May, the House passed a similar measure attempting to block the EPA from creating the rule.
Since the 1959 Cuban Revolution—in which Fidel Castro overthrew the U.S.-supported government of Fulgencio Batista—the U.S.-Cuban relationship has been characterized by confrontation. After the new Cuban government began nationalizing foreign assets in Cuba and seeking closer relations with the Soviet Union, the United States responded in a series of escalating steps: embargo, a CIA-backed invasion by Cuban exiles, and covert operations seeking Castro’s ouster.
While these policies of embargo and isolation have historically enjoyed bipartisan support, their effectiveness at changing the behavior of the Castro regime has been less than clear. For some time, analysts and former diplomats have recommended a change in approach.
President Barack Obama—with prompting by the personal intervention of Pope Francis, who acted as a go-between for the United States and Cuba—announced on December 17, 2014, that he would begin a process toward the normalization of relations with Cuba.
While the embargo can only be ended via congressional legislation, the president can use his authority to conduct foreign relations and the abilities of the Departments of State, Treasury, and Commerce to amend specific regulations to expand and formalize a diplomatic relationship with the Cuban government.
On May 5, the United States announced it was authorizing ferry service to operate between Cuba and Florida.
The State of New York also announced it was partnering with JetBlue to offer charter flight services between John F. Kennedy International Airport and Havana’s José Martí International Airport, beginning July 3.
What It Does
The restoration of diplomatic ties consists of a series of steps by both the United States and Cuban governments.
As an initial part of the process, both countries engaged in a joint deal that saw the return of imprisoned American Alan Gross, a U.S. Agency for International Development contractor who the Cubans had accused of espionage, in exchange for the U.S. return of Cuban agents who had been convicted of spying on anti-Castro groups based in Miami.
As part of the normalization process, the Obama administration promised to begin the process of re-opening a U.S. Embassy in Havana. The announcement also highlighted several issues of mutual importance to the United States and Cuba: migration, counternarcotics, the environment, and human trafficking.
The Obama administration will liberalize travel and remittance policies for Cuban-Americans who wish to visit or support their relatives in Cuba (Americans without Cuban relations who fall into twelve specific categories can also apply for visas to visit Cuba without need of a special license from the United States, but the general tourism travel to Cuba is still illegal). The quarterly cap on remittances will be lifted from $500 to $2,000. American visitors will be able to use their debit and credit cards in Cuba, and financial transactions between the two countries will be broadened. Visitors returning to the United States will be able to import Cuban goods worth up to $400. The United States will also permit the export of certain commercial goods (telecommunications equipment, building materials, and agricultural equipment) in order to “empower the nascent Cuban private sector” and expand Cuban access to the Internet.
The U.S. Department of State will review Cuba’s designation as a state sponsor of terrorism and report within six months whether that designation is still applicable.
Many of the initiatives announced on December 17, 2014, are already in effect, including formal discussions between U.S. and Cuban representatives about the state of the relationship between the two countries. Other plans are expected to roll out as progress in talks between the two nations proceed.
On January 16, 2015, new rules went into effect, relaxing trade and travel restrictions for U.S. citizens. Those who meet twelve criteria for travel to Cuba (close relatives of those living in Cuba; journalists; researchers; members of religious, charitable or research organizations; and so on) do not need to apply for a U.S. license in order to travel.
On July 20, the United States and Cuba formally restored full diplomatic relations. Embassies in Havana and Washington, D.C., were reopened, with the Cuban foreign minister traveling to Washington for a ceremonial flag-raising and discussions with secretary of state John Kerry—the first meeting of the two nations’ top diplomats on U.S. soil since 1958.
The United States began its high-level negotiations directly with the Cuban government in Havana on January 21, 2015, with a subsequent bilateral dialogue on February 25. On March 31, 2015, the United States and Cuba conducted their first formal dialogue on human rights. The meeting was described in a Reuters news story as “preliminary” and “professional,” in which both sides “expressed willingness to discuss a wide range of topics in future substantive talks.” No date has been announced for those future talks.
On April 9, 2015, the U.S. State Department transmitted to the White House its recommendation that Cuba be removed from the list of state sponsors of terrorism. That same day, Secretary of State John Kerry met with Cuban Foreign Minister Bruno Rodriguez, the highest-level meeting between U.S. and Cuban officials since the Revolution. At the Summit of the Americas in Panama, which Cuba attended for the first time, President Obama and Castro met, the first formal meeting between the heads of state of both countries since the 1950s. On Tuesday, April 14, 2015, the United States announced it would remove Cuba from the list of state sponsors of terrorism.
An additional positive impact was the release of Alan Gross, whose health was rapidly declining in Cuban prison. It was also a positive sign that Cuba released all of the fifty-three political prisoners it had promised to release as part of the negotiations.
The immediate response to the initial announcement was positive, coming from some surprising quarters:
- Julia Sweig, at the time the Council on Foreign Relation’s expert on Cuba, said the normalization process had “risks that are far outweighed by the rewards” and that, over time, the restoration of normal diplomatic relations would spur reforms in the Cuban economy and government.
- Cato’s Doug Bandow also celebrated the move, saying that there was no prevailing security or humanitarian grounds supporting the embargo, saying that, instead of pressuring Fidel Castro into reforming, it has made him the champion of leftist anti-Americanism in Latin America.
- Conservative columnist George Will said normalization was the right move, as the embargo and isolation of Cuba was a cold war anachronism.
Much initial opposition came from conservatives and many in the Cuban refugee community in Florida.
- Marco Rubio, Florida’s junior senator, vowed to block the nomination of anyone named ambassador to Cuba (regardless of their qualifications) as well as spending for an embassy in Havana, and saying President Obama’s efforts were an “illusion.”
Recent polling actually has shown an increase in favorability toward the policy change among Cuban-Americans, however: 51 percent approval/40 percent disapproval, up from 48 percent/44 percent in December, when normalization was announced.
From the start, Internet service providers (ISPs) have typically treated bits of information traveling on their networks equally. That is, they haven’t privileged any one website, online service, or piece of content over another—even if the owner of that site, service, or content were willing to pay enormous amounts of money to make its material easier to access. This principle—known as “network neutrality”—is why your personal blog takes no longer to load than the New York Times. It is also why companies that started in dorm rooms (like Facebook) have been able to compete with—and sometimes topple—established empires. In short, net neutrality has allowed the Internet to become the innovative, experimental, and open space we cherish today.
Though usually abided by in practice, the government’s authority to enforce net neutrality through regulation has long been disputed. In 2008, the Federal Communications Commissions (FCC) sanctioned Comcast for “throttling”—that is, slowing down—users’ access to a file-sharing service called BitTorrent. Comcast appealed the FCC’s order, and in 2010, a federal appeals court ruled that the FCC lacked the authority to prevent Comcast from slowing down BitTorrent traffic. In response, the FCC announced new Open Internet Rules in December 2010, which prohibited “blocking” or “unreasonable discrimination” by broadband providers.
But, in January 2014, the courts again sided with an ISP—this time, Verizon—repudiating the FCC’s rules against network discrimination. Because the FCC had previously classified broadband providers such as Verizon and Comcast as “information services” and not as “telecommunications services,” the court ruled that the FCC lacked the authority to enforce net neutrality on cable networks. Telecommunications services (such as telephone lines) are subject to much greater regulation, because they are considered “common carriers” under the Communications Act of 1934.
To the chagrin of consumer advocacy groups and many tech companies, the FCC proposed rules in April 2014 that would have allowed broadband providers to charge companies a premium for preferential treatment—precisely the scenario net neutrality is meant to prevent. In response, consumer groups and millions of individuals submitted requests and comments to the FCC in support of net neutrality.
On November 10, 2014, President Barack Obama publicly asked the FCC to reclassify consumer broadband services under Title II of the Communications Act, allowing the agency to regulate broadband as a common carrier.
Following the president’s lead, the FCC voted on February 26, 2015, to reclassify broadband under Title II and enforce strict net neutrality laws. Unlike the 2010 rules, the new regulations would extend to mobile broadband service.
The 3-2 vote was split along party lines, with Chairman Tom Wheeler and the two other Democratic commissioners in favor, and two Republican commissioners against.
What It Does
The new regulations have several key provisions that were sought by net neutrality advocates. Specifically, the rules state the following:
- No blocking: broadband providers may not block access to legal content, applications, services, or non-harmful devices.
- No throttling: broadband providers may not impair or degrade lawful Internet traffic on the basis of content, applications, services, or non-harmful devices.
- No paid prioritization: broadband providers may not favor some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind—in other words, no “fast lanes.” This rule also bans ISPs from prioritizing the content and services of their affiliates.
The order also declares that the FCC shall refrain (forbear) from enforcing some twenty-seven provisions of Title II—and 700 associated regulations—that are not necessary for ensuring net neutrality. For example, broadband providers will not be subject to utility-style rate regulation.
The new rules were released in full on March 12, 2015. The rules will take effect sixty days after they appear in the Federal Register.
While the full effect of the rules will not be known for some time, it is interesting to note that Internet service providers—who opposed the new rules—in fact saw their share prices surge when the rules were announced.
Two lawsuits against the FCC order have already emerged in what is expected to be a drawn-out legal battle.
- On March 23, 2015, Texas-based broadband provider Alamo Broadband filed suit against the FCC in the Fifth Circuit Court of Appeals in New Orleans.
- USTelecom—an industry group representing AT&T, Verizon, and others—filed another in the D.C. Circuit Court of Appeals.
Both request that the court “hold unlawful, vacate, enjoin and set aside” the net neutrality order.
One of the dissenting Republican FCC commissioners, Ajit Pai, has also asked the House of Representatives to strip funding from the FCC budget that would be used to implement the order.
A number of companies, industry groups, and members of Congress have leveled criticism of the new rules:
- Verizon said the FCC’s decision would “encumber broadband Internet services with badly antiquated regulations,” calling it “a radical step that presages a time of uncertainty for consumers, innovators and investors.” The company issued the release in a typewriter font—and later, in Morse code—to bring attention to what they view as the antiquated model of regulation employed by the order.
- National Cable and Telecommunications Association (NCTA) president and CEO Michael Powell said the FCC order would usher in “a backward-looking regulatory regime that is unsuited to the dynamic and innovative Internet”—well beyond what is necessary to achieve net neutrality, which the NCTA nominally supports. Powell warned that future FCC commissioners would abuse the broad regulatory powers granted under Title II.
- Comcast said it “fully embraced” the spirit of the rules, but objected to Title II reclassification, which “is certain to lead to years of litigation and regulatory uncertainty and may greatly harm investment and innovation.”
- CTIA, an industry group of wireless providers, called the order “disappointing and unnecessary,” suggesting that “Title II puts at risk our nation’s 5G future and the promise of a more connected life.”
- House Speaker John Boehner said, “Overzealous government bureaucrats should keep their hands off the Internet.” And twenty-one other Republican lawmakers moved to nullify the FCC order through a “Congressional Review Act” resolution.
Meanwhile, consumer and advocacy groups, content providers, and members of Congress have spoken in support of the new regulations.
- Consumer groups and net freedom advocacy groups—Consumer Federation of America (CFA), Consumers Union, American Civil Liberties Union (ACLU), Center for Democracy and Technology (CDT), Demand Progress, Electronic Frontier Foundation (EFF), Fight for the Future (FFTF), Free Press, and others—hailed the decision.
- Netflix called the decision a “win for consumers” that will help ensure “ISPs cannot shift bad conduct upstream to where they interconnect with content providers like Netflix.”
- Senator Al Franken called the order “an enormous victory . . . the culmination of years of hard work by countless Americans who believe—just as I do—that the Internet should remain the free and open platform that it’s always been.”
Since 1982, there have been at least sixty-nine mass shootings in the United States, thirty-two of which occurred after 2006. More than three-quarters of the guns used by shooters were obtained legally. The United States leads the world in gun ownership, with almost nine guns for every ten people in the country, according to a Small Arms Survey. Among its developed counterparts, the United States has the second-highest percent of murders by firearms (68 percent of 17,128 murders in 2007).
Compared to other nations, the United States has historically had lax gun control policies. In 1993, Congress passed the Brady Handgun Violence Act, which instituted federal background checks on firearm purchases from federally licensed retailers. However, an estimated 40 percent of gun sales (from a 1997 National Institute of Justice survey) are private and do not involve a licensed dealer, meaning they do not require a background check. In 1994, Congress passed the Violent Crime Control and Law Enforcement Act, which banned assault weapons. The act expired in 2004 and has not yet been reinstated.
A majority of Americans support some sort of increased gun control. A 2012 poll showed that 74 percent of National Rifle Association (NRA) members and 87 percent of non-NRA gun owners support requiring criminal background checks for anyone purchasing a gun. In 2013, a poll conducted by ABC/Washington Post revealed that 52 percent of people favored stricter gun control laws and 57 percent supported a nationwide ban on assault weapons.
A number of violent gun incidents have occurred during Barack Obama’s presidency, including the 2011 assassination attempt of Gabrielle Giffords in Tuscon, Arizona, the 2012 shooting at a screening of “The Dark Knight Rises” in Aurora, Colorado, and the 2012 shooting at Sandy Hook Elementary School in Newtown, Connecticut. Overall, there have been at least fourteen mass shootings during Obama’s presidency.
In recent years, representatives have attempted to pass numerous pieces of legislation to address gun control, with little success. The most notable attempt was in 2013, when an amendment that would have required background checks on all commercial sales of guns was defeated in the Senate by six votes.
On January 16, 2013, President Obama announced twenty-three executive actions that his administration was taking to address gun violence, under the initiative “Now Is The Time.” Three of the executive actions are Presidential Memoranda:
- Improving Availability of Relevant Executive Branch Records to the National Instant Criminal Background Check System
- Engaging in Public Health Research on the Causes and Prevention of Gun Violence
- Tracing of Firearms in Connection with Criminal Investigations
What It Does
The three memoranda reflect important issues that the administration believes are integral in helping to prevent future gun violence.
1. Facilitating Federal Background Checks
Through presidential memorandum, Obama directed the Department of Justice to issue guidance to agencies regarding the identification and sharing of relevant Federal records and their submission to the National Instant Criminal Background Check System (NICS). The memorandum specifies that agencies should prioritize making those records available to NICS and should report their progress to the President. Additionally, it establishes a NICS Consultation and Coordination Working Group to decide whether an agency possesses relevant records and whether such records should be provided to NICS.
Additional executive actions addressing this issue include, among others:
- Providing states with incentives ($20 million in fiscal year 2013 and a proposed $50 million in FY 2014) to share information on their criminal history and mental health records.
- Beginning the regulatory process to remove unnecessary legal barriers under the Health Insurance Portability and Accountability Act so that states may more freely share information about mental health issues involving potential gun purchasers.
2. Improving Mental Health Research and Services
Through presidential memorandum, Obama ends the freeze on gun violence research by directing the Secretary of Health and Human Services to conduct or sponsor public health research into the causes of gun violence. Scientific agencies are not allowed to use funds to advocate or promote gun control, but the memorandum specifies that research on gun violence is not advocacy, but rather, “critical public health research that gives all Americans information they need.”
Additional executive actions addressing this issue include, among others:
- Issuing final regulations governing how existing group health plans that offer mental health services must cover them at parity with medical and surgical benefits under the Mental Health Parity and Addiction Equity Act of 2008.
- Issuing a letter to state health officials making clear that Medicaid plans must comply with mental health parity requirements.
3. Strengthening Law Enforcement Tools to Prosecute Gun Crime
Through presidential memorandum, Obama is requiring federal law enforcement to trace all firearms taken into federal custody. The reason for this, as given by the memorandum, is that tracing is an important investigative tool that may lead to the apprehension of suspects as well as provide valuable intelligence about patterns on regional gun movement.
Additional executive actions addressing this issue include, among others:
- Nominating a director for the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
- Proposing rulemaking to give law enforcement the ability to run a full background check on an individual before returning a seized gun.
In June of 2013, the White House released a Progress Report on the President’s Executive Actions to Reduce Gun Violence. It noted that the administration has completed or made significant progress on twenty-one of the twenty-three executive actions.
On August 29, 2013, President Obama announced two new executive actions that would build on the previous twenty-three.
- The ATF issued a proposed regulation that requires trusts or corporations that acquire weapons which require registration and a fingerprint-background check to run such checks on any associated individuals.
- The administration announced a new policy of denying requests to private entities to bring military-grade firearms back into the United States, with only a few exceptions, such as for museums.
President Obama acknowledged in an interview that, “As important as these steps are, they are in no way a substitute for action by Congress.” However, these actions have had some impact already, such as:
- In the nine months since the president’s directive, federal agencies made available to the NICS over 1.2 million additional records identifying persons prohibited from possessing firearms, which is nearly a 23 percent increase from the number of records that federal agencies had made available by the end of January.
- The expansion of mental health and substance use disorder benefits and parity protections in the ACA has the potential to help 62 million Americans.
- Josh Sugarmann, Executive Director of the Violence Policy Center praised the administration’s effort, stating: “The combination of improved and expanded background checks, effective bans on assault weapons and high-capacity ammunition magazines, and stronger anti-trafficking laws will work together to prevent another Newtown and to stem the daily gun violence that tears apart too many families and communities.”
- Dan Gross, president of the Brady Campaign to Prevent Gun Violence, also praised the Administration’s actions, stating that the president, “has shown tremendous leadership.”
- The NRA gave strong objections to the administration’s actions, issuing a statement that said: “Attacking firearms and ignoring children is not a solution to the crisis we face as a nation. Only honest, law-abiding gun owners will be affected and our children will remain vulnerable to the inevitability of more tragedy.”
- John Donohue, professor of Law at Stanford University, asserted that few of the administration’s proposals would address the problem of stolen guns. In an article in the Washington Post, he stated, “About a million guns are stolen each year. Shutting off the spigot on the purchase end is helpful, but it does not solve the problem that some gun owners are completely irresponsible in how they allow access to their guns to criminals.”
This project was produced by The Century Foundation, a New York–based think tank that seeks to foster opportunity, reduce inequality, and promote security at home and abroad. TCF pursues its mission by conducting timely, nonpartisan research and policy analysis that informs citizens, guides policymakers, and reshapes what government does for the better.
Graphic Designer and Developer