ACE

Category: ACE Research

  • Understanding the No Surprises Act

    Understanding the No Surprises Act

    What is Surprise Billing?

    Surprise billing refers to any unexpected bill received by patients but is especially prevalent with balance billing. Balance billing is the process of billing a patient the remainder of what insurance has not agreed to cover for a medical service or treatment. Even though emergency services are required by law to be provided regardless of ability to pay, surprise bills represent both a perceived and realistic hurdle to patient care due to their long-term financial effects. 

    The Impact of Medical Debt

    Balance bills can range widely in cost, and significant bills can cause patients to go into medical debt and suffer from financial stress. Medical debt is an issue that impacts millions of Americans: in 2017, 19% of American households reported medical debt that could not be paid in full. This debt amounted to an average of $2,000 even in households without regular monthly medical expenses. People with disabilities and low-income families—particularly those on aid programs such as WIC—are disproportionately affected. Additionally, 30% of those with medical debt had difficulty paying for necessities (food, heat, housing, etc.) as a result of healthcare costs. The threat of medical debt may prevent those who require medical attention from seeking care. In 2018, 44% of Americans did not visit a doctor when sick or injured due to cost. 

    Expanding Care Availability and Affordability

    President Biden signed the No Surprises Act (NSA) into law as part of the Consolidated Appropriations Act of 2021. The NSA intends to protect patients from surprise medical bills, and expand the availability and affordability of medical services through the following provisions:

    1. The NSA prohibits insurers from billing more than the Qualifying Payment Amount (QPA), or the median in-network rate, for emergency services. Services such as air ambulance transportation are included in this but ground ambulances are not.
    2. Out-of-network services provided at in-network facilities can only be charged at the median in-network rate. This protects patients from receiving surprise bills when they do not select who provided their care.
    3. The NSA establishes a notice system that requires that patients be aware of the approximate cost of out-of-network services before receiving care. This estimate explains the entire cost of the service and what the patient would be expected to pay, ensuring that patients are informed and free to choose between in-network and out-of-network care. Previously the equivalent service of Good Faith Estimates from the Affordable Care Act was available upon request, but these are now required in all cases. 
    4. The NSA establishes a third-party dispute process for both patients and healthcare providers, intending to remove patients from medical billing disputes. These third-party mediators consider factors such as the “usual and customary rates” for the services, and will then propose what they consider a fair and reasonable payment amount. Nonetheless, this Independent Dispute Resolution (IDR) process is currently the subject of legal discourse due to issues relating to administrative law and its potential effects on healthcare providers.

    Concerns and Legal Delays

    The Independent Dispute Resolution (IDR) system has consequences for both healthcare providers and patients. Larger invoices can partially be attributed to the commonplace upcharges for out-of-network services. Studies have shown that physicians collect a higher percentage of the cost when the service is out-of-network. Meanwhile, the IDR is intended to protect patients from extraneous expenses but the process itself charges administrative fees ranging from $50 to $940 per party. The decision of the mediator is not binding, meaning that the insurer may disregard advice and proceed to bill the initial balance. Conversely, success by the mediator could result in lower payments to healthcare providers, potentially reducing available hospital resources and quality of care. Healthcare providers may now decline to render services if they will not be compensated properly. 

    At least six lawsuits (some having been consolidated) have been discussed in federal district courts over the parameters of the NSA, finding errors in the arbitration (IDR) process and QPAs. Some critics take issue with potential bias in the IDR process as insurers likely have more expertise with specific services and resources, as well as experience in negotiating payment disputes. Furthermore, some critics believe the process will increase premiums while others believe this may incentivize insurers to set falsely lower rates. In response to many of these complaints an interim final ruling was released to clarify the intent of the IDR process. In February 2023, a federal judge ruled in favor of the Texas Medical Association (TMA) in its lawsuit against the Department of Health and Human Services, stating the “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate,” in reference to the clarifications previously made over the IDR process. The TMA received notable support from the American Hospital Association and American Medical Association, among others, who agree that using only QPAs does not properly give weight to the compensation practitioners deserve. The most recent decision means that QPA’s are not the sole consideration in mediation, but these lawsuits are ongoing and decisions may continue to change.

    Conclusion

    The No Surprises Act is intended to protect patients from surprise bills in scenarios out of their control. Yet the bill itself is in legal discourse due to the wording of the dispute resolution process. Its impact on physician and hospital funding is still to be resolved, but overall, the Act has already made progress in reducing unexpected medical bills as intended.

  • Understanding the Pesticide Debate

    Understanding the Pesticide Debate

    Pesticides are chemicals that target and kill organisms which humans have deemed as harmful. Pesticide is a generalized term for many different types of chemicals including herbicides, insecticides, and fungicides. These chemicals must be registered with the Environmental Protection Agency (EPA) in order to be used. This process entails examining their ingredients, which crop they will be used to protect, amount and frequency of use, and storage and disposal. 

    The five major legislations that regulate pesticide use: 

    1. The Federal Insecticide, Fungicide, and Rodenticide Act: requires all pesticides sold and distributed in the United States (including imported pesticides) to be registered by the EPA.
    2. The Federal Food, Drug and Cosmetic Act: requires the EPA to set pesticide tolerances for all pesticides used in or on food or in a manner that will result in a residue in or on food or animal feed. A tolerance is the maximum permissible level for pesticide residues allowed in or on human food and animal feed.
    3. Food Quality Protection Act: this act amended both FIFRA and FFDCA. The EPA must find that a pesticide poses a “reasonable certainty of no harm” before it can be registered for use on food or feed. Each pesticide registration must be reviewed at least once every 15 years.
    4. Pesticide Registration Improvement Act: companies must pay service fees according to the category of their registration. Shorter decision review periods are provided for reduced-risk registration applications. 
    5. The Endangered Species Act: requires federal agencies to ensure that any action they authorize, fund, or carry out, will not likely jeopardize the continued existence of any listed species, or destroy or adversely modify any critical habitat for those species. All pesticide products that EPA determines “may affect” a listed species or its designated critical habitat may be subject to EPA’s Endangered Species Protection Program.

    Origins of the Pesticide Debate

    The pesticide debate first entered the national consciousness thanks to marine biologist and writer Rachel Carson in 1962, when she published her book Silent Spring that focused on the negative effects of DDT, an insecticide. Attention was drawn to DDT because of its effects on bird populations. DDT disturbed endocrine functions in birds which led to eggshell thinning in impacted birds. DDT also caused adult birds to lose control of their nerves and muscles. Concerns over DDT’s adverse effects on the environment and potential harm to humans led to the EPA banning it in 1972. After the breakout success of Silent Spring, Supreme Court Justice William O. Douglas described pesticides as “sinister and little-recognized partners of radiation in changing the very nature of the world.” Carson argued that chemicals “work unknown harm” through their “contamination of air, earth, rivers, and sea with dangerous and even lethal materials”.

    A recent study by Pew Research surveyed public opinions on the safety of fruit and vegetables grown with pesticides. Only 26% of those surveyed responded that they believed pesticides were safe, while 48% thought they were unsafe. Those most negatively affected by the effects of pesticide spraying are agricultural workers. On the other hand, produce and chemical industries greatly benefit from the use of pesticides. The process of deciding the risk versus return of using pesticides is a nuanced decision. A complete appraisal of the social costs and benefits needs to be understood to find the largest net gains to society.

    In Favor of Strong Pesticide Regulation

    Arguments in favor of increasing pesticide regulation cite the negative effects that have been observed on the environment. Pesticides can’t be completely specialized, meaning that they often also have negative effects on non-target organisms. This leads to the removal of species which are beneficial to the crop, which is counter productive towards the goal of increased yield. Pesticides also bioaccumulate and biomagnify which can destabilize the food chain. Bioaccumulation is when the concentration of a toxin accumulates in a species faster than the organism can eliminate it, and biomagnification is the tendency for toxic substances to be found in greater quantities in organisms higher up the food chain as they consume many smaller organisms with small amounts of toxins. The effects of pesticides on many species are prevalent; for example it is estimated that around 10% of birds exposed to pesticides on U.S agricultural lands die from the exposure. A study in the Indian Journal of Microbiology found heavy use of pesticides has also been found to decrease the fertility of soil which can take several years to recover. 

    A second key argument in favor of stricter pesticide regulation cites the adverse effects pesticides have on human health. It was found that 98-99% of Americans carried in them residues of dieldrin in low concentration. Similarly to how pesticides bioaccumulate in the food chain, they also accumulate in our bodies. Regular exposure builds up each day which can eventually lead to hospitalization or even death. Some argue that farmers can implement tactics that naturally reduce loss of crops from pests rather than utilizing primarily pesticides. Natural enemies of pests are just as susceptible to pesticides as the target species. By implementing integrated pest management, a mix of biological and chemical controls, target species will be more efficiently removed with less pesticide spray required. For this to work though, understanding the placement of pesticide spray and the susceptible life stages of natural predators is vital. Vertical farming is a new type of farming where crops can be grown in an urban biosecure environment free from pests. This style of farming has zero need for pesticides, reduces water usage, and greenhouse gas emissions. In the future these tactics could be vital to the survival of the agriculture industry.

    In Opposition to Stronger Regulation

    Those in opposition to stronger pesticide regulation claim that they are the basis of cost-effective farming. The use of herbicides has led to a decrease of manual farm work, reducing labor costs and the overall cost of food for consumers. When used properly, they also improve crop yields, leading to greater accessibility and food security. In the United States, farm production loses the equivalent of thirty percent of sales to pests each year. By reducing the amount of pests that feed on plants, huge quantities of food can be preserved. The growing population of the Earth requires increasing food production, which necessitates the use of pesticides to ensure maximum crop yields. The population of the world doubled from 1950-2000, which meant agriculture had to increase production accordingly. This has led to a rapid increase in pesticide use. Without the use of pesticides it is estimated there would be a 78% loss of fruit production, a 54% loss of vegetable production, and 32% loss of cereal products. Even with the use of pesticides 30% of world-wide yield is still lost.

  • The Inflation Reduction Act of 2022 and US-EU Relations

    The Inflation Reduction Act of 2022 and US-EU Relations

    The Inflation Reduction Act 

    The Inflation Reduction Act of 2022 (IRA) was signed by President Joe Biden on August 16, 2022. The bill was designed to reduce US dependence on fossil fuels in the transportation and manufacturing sectors. It will also create clean energy jobs, and is projected to create up to 9 million jobs by 2030. 

    Consumer spending on gasoline and energy has risen sharply since 2016. The IRA reduces transportation costs for Americans by offering incentives to consumers and businesses to purchase electric and hydrogen-powered vehicles. Under the law, citizens can claim tax credits of up to $7500 for the purchase of electric and hydrogen-powered vehicles. Vehicles and citizens must meet certain requirements to qualify for the full credit, including:

    • 50% of battery components must be assembled in North America. 
    • 40% of critical raw materials used to make the electric battery must be extracted in the United States or a country with which the US has a trade agreement. 
    • Single filers must have an annual modified adjusted gross income of less than $150,000, or $300,000 for married couples filing jointly. 

    In addition to incentives for consumers, the IRA provides $1 billion to fund zero-emission buses, trucks, and other commercial and government-owned vehicles. Reducing greenhouse gas emissions by 2030 helps the United States achieve the objectives of the Paris Agreement, an international treaty created to limit global warming to less than 2°C, which it formally rejoined in January 2021. The European Union and its twenty-seven Member States also signed the Paris Agreement. To meet the goals of the Paris Agreement, the European Union created The EU Green Deal. With the United States and the European Union both committed to reducing greenhouse gas emissions, leaders were optimistic that the relationship between the European Union and the United States would be strengthened. 

    European Response

    To meet the Biden Administration’s Buy American guidelines, the IRA limits tax credits for hydrogen-powered and electric vehicles to those that have final assembly in North America. European leaders expressed concern that the IRA would have a negative impact on EU automobile and auto parts makers. Germany, France, and Italy have significant auto industries and economists predicted job losses if automakers relocate some of their operations to North America to take advantage of the IRA’s generous subsidies.

    Auto industry leaders appealed to the EU Commissioner for the Internal Market, Thierry Breton, to raise their concerns with the Commission and the Biden Administration. President Emmanuel Macron of France traveled to the United States in late November to discuss the matter directly with President Biden. Biden committed to try to “tweak” the IRA to be more inclusive of European automakers. Breton also began to challenge the European Commission to act quickly to modify its internal market rules to protect the automotive sector in Europe. Commissioner Margrethe Vestager, who protects the level playing field of the Single Market, expressed concern about matching US subsidies. She ensures compliance with State Aid rules contained in the Treaty on the Functioning of the European Union. Articles 107-108 of the treaty specifically address State Aid. Public subsidy of industry by an individual Member State can incentivize businesses to relocate to Member States that provide subsidies, either in the form of funding, favorable taxation, or other means. Subsidies can potentially cause tension among Members and weaken the European Union. State aid disproportionately harms Member States with smaller economies that are not capable of providing direct funding or foregoing tax revenues, so aid that disrupts competition is prohibited. Although it is common practice in the United States for local and state governments to offer incentives to industry to relocate, it is prohibited in the European Union. The European Union is not a federal government. It is a supranational government whose members are independent countries. If Member States fail to cooperate and honor the treaties of the European Union, there is a risk of fragmentation of the Union. 

    Breton, Vestager, leaders of Member States, and industry representatives agreed the European Union needed a response to the IRA; however, they disagreed about what form that response should take. Proposals from Breton, Macron, and German Chancellor Olaf Scholz strongly favored creating EU funded subsidies and allowing Member States to extend national subsidies to industry. Commissioner Vestager and Dutch Prime Minister Mark Rutte expressed the concerns of 11 smaller Member States who opposed relaxing State Aid rules, arguing subsidies could place them at a disadvantage within the European market. The European Union has a complex decision-making process, which makes rapid policy responses difficult. In the United States, Congress can quickly propose laws and pass legislation, as it did in the case of the IRA, which was announced on July 27, 2022, and signed into law on August 16. In contrast, the Green Industrial Plan designed by the European Commission was not proposed until nearly six months after the IRA went into effect. It will accelerate the transformation of Europe’s automotive manufacturing network by speeding up regulatory decision-making. 

    Some IRA provisions had unintended consequences for the European Union and its relationship with the United States. Initially welcomed by EU leaders as a positive step toward meaningful climate action, business leaders quickly identified subsidies that could harm European manufacturers. The fear of European job losses strained US-EU relations. The IRA also caused disagreement among Commissioners and Member States about how to design and finance its own subsidy plan. Commission President Ursula Von Der Leyen urged compromise and maintaining good relations with the United States. 

    Common Goals, Aligned Actions

    Leaders of the European Union and the United States have relied on their strong relationship and shared values to reach limited compromises on the interpretation of the IRA. On December 29, 2022, the United States Department of Treasury announced that Americans will be able to use the IRA tax credit to lease electric and hydrogen-powered vehicles from European automakers. The U.S. Department of Energy created an online tool that allows taxpayers to verify where an automobile was assembled to ensure they can claim the credit. American policymakers continue to review the law and adjust the tools as they refine their interpretations of it. The law may benefit European automakers who have North American assembly plants and provide American consumers with more choices. Finally, talks between US and EU leaders about the IRA have prompted increased dialogue among leaders to coordinate efforts to combat climate change by reducing dependence on fossil fuels. Comprehensive, coordinated policies like the IRA and the Green Deal Industrial Plan help the US and the EU work together to achieve their shared climate goals.

  • US Involvement in the Lithium Triangle

    US Involvement in the Lithium Triangle

    Lithium, also known as white gold, is an important component in rechargeable batteries. These batteries are used in portable technology such as cell phones and laptops, as well as large scale electrical components. Specifically, Lithium-ion batteries store energy for solar panels, electric vehicles, and wind turbines making the resource essential for shifting away from fossil fuels. As a result, demand for lithium is on the rise, and the global consumption of lithium increased by over 40% in 2022.

    Lithium is mostly extracted from brine lake deposits or salares, as these locations have the highest concentration of the mineral. While there are several salares in the United States, the most lithium-rich salares are in Bolivia, Chile, and Argentina. In fact, the overlapping area between these countries is home to over half of the world’s lithium, garnering this region the title of the “Lithium Triangle.”

    The US has several domestic lithium projects such as Abermale’s mine in Silver Peak Nevada or Lithium Americas’ upcoming Thacker Pass mine on the Oregon-Nevada border. Even so, these mines cannot match domestic demand, hence why the US has already started working with Lithium Triangle nations and imported over 90% of its lithium from Argentina and Chile between 2016-2019. 

    Demand for Clean Energy and Lithium

    The Biden Administration recently passed legislation investing in clean energy and the lithium industry. The Bipartisan Infrastructure Law included an emphasis on electrical vehicles and clean energy technologies. Specifically, the deal contained a $65 billion investment in innovations within the sphere of clean energy as part of the overall goal to become a zero-emissions economy. The following year the administration passed the Inflation Reduction Act which provided funding to domestic-based clean energy projects and battery production. These two bills represent a conscious effort to enhance US energy production, thus requiring more lithium.

    Several Republicans are skeptical of the Inflation Reduction Act, claiming that the subsidies for battery production would end up supporting Chinese companies. Republican Frank Lucas wrote a letter to the Department of Energy questioning a grant for Microvast, a company with Chinese ties. These concerns highlight the larger issue of competing with China for control of the lithium industry.

    Competition with China 

    China is the US’s main rival in lithium battery technologies, as well as the electric vehicle sector. In a recent speech, Secretary of State Antony J. Blinken reaffirmed that the US strategy towards China is based on economic competition, especially through technological production and foreign influence. Meanwhile, Chinese companies are at the forefront of battery production and several Chinese mining companies have purchased shares in Lithium Triangle operations.

    The Department of Energy recognizes a Chinese dominance on the lithium-ion battery supply chain. This power is increased through investment in the mining process. The DOE approved National Blueprint for Lithium Batteries highlights working with allies to ensure a steady supply of the critical mineral and create more domestic processing sites. Investing in the Lithium Triangle could help the US compete by counteracting China’s recent acquisitions. 

    Extent of Involvement

    In June of 2022, the US announced its Minerals Security Partnership in hopes of addressing the rising demand for critical minerals used in clean energy; however, the Lithium Triangle countries were not included in this partnership. Although the US recognizes a need for lithium importation, it is not set on partnering with these South American countries. This leaves involvement in the Lithium Triangle to the private sector through companies such as Abermale and Lithium Americas. 

    In examining this involvement, it is important to note that China has already beat out US involvement in Bolivia as the government has recently partnered with several Chinese firms to manage the country’s lithium mining. Meanwhile, Chile’s mining sector is heavily state controlled with only two companies allowed to operate, again limiting options. Argentina is more open to foreign companies with 36 projects as of 2023. The success of American owned company Livent demonstrates an opportunity for more private involvement in the region. Still, additional companies in Argentina may need US financial support because of the overall risk in doing business within the country. 

    The Inflation Reduction Act provides a potential for these partnerships. The plan includes tax cuts for foreign companies within the battery production industry. That being said, this financial support only applies to countries with US free trade agreements which neither Argentina nor Bolivia have. Several Republicans, on the other hand, prioritize supporting domestic mining projects rather than expanding these financial partnerships to the rest of the Lithium Triangle.   

    Ecological Damage

    Another issue to consider with these lithium mines is the local ecological threat. Throughout the Lithium Triangle, mining operations resulted in a decrease in the Flamingo population as well as general harm to the nearby wetland nature reserves. Additionally, the process of water evaporation needed to extract lithium is hurting transandean Indigenous populations by depleting their water supply. With increased US involvement in the region, the mining operations would only grow to match American demands and as a result the potential for further harming the environment and local communities would increase as well.

    The debate around American involvement in the Lithium Triangle boils down to whether the private and domestic sectors can provide enough to match US demands or if the government has to invest more. No matter what, the International Energy Association predicts that the demand for lithium will rise over 90% if countries hope to meet the Paris Agreement in the next couple of decades, so the importance of the lithium industry is not going away.

  • Successes and Failures of US Response to Ukrainian Refugees

    Successes and Failures of US Response to Ukrainian Refugees

    Background

    In February of 2022, Russia invaded Ukraine, a continuation of Russian expansion that began with their annexation of Crimea in 2014. The invasion was not localized—like the annexation of the Crimean Peninsula—and Ukrainians were forced to leave the country on a large scale (8.1 million fled as of March 2023) in order to escape the Russian bombardment of Ukrainian cities. In response to the Ukrainian refugee crisis, multiple countries have admitted Ukrainian refugees, including the US. In addition, the UN estimates that 17.6 million people are in need of humanitarian assistance as a direct result from the war.

    The Biden Administration announced its plan to help Ukrainian refugees on April 21, 2022, two months after war broke out. The plan, “Unite for Ukraine,” involves US citizens who volunteer to sponsor and host Ukrainian refugees. Unite for Ukraine grants Ukrainian refugees an expedited immigration process and makes government assistance available to them while on parole. This program is set to last for two years. Through Unite for Ukraine, the Biden administration promised to admit 100,000 Ukrainian refugees, a mark reached in five months after the program’s launch.

    The US response to Ukrainian refugees was unprecedented in recent history. The United States played a major role in establishing the international refugee system after World War II and admitted vast numbers of refugees, especially from Vietnam, Soviet states, and Kosovo. However, since the early 2000s the US had pursued a more restrictive refugee policy. The current response to the refugee crisis is significant, both because the US mobilized to quickly accept a large number of refugees, and because this response includes generous humanitarian aid to those displaced. The White House announced, “we are prepared to provide more than $1 billion in new funding towards humanitarian assistance for those affected by Russia’s war in Ukraine and its severe impacts around the world, including a marked rise in food insecurity, over the coming months. This funding will provide food, shelter, clean water, medical supplies and other forms of assistance.”

    Policy as a Success

    Many view the program as a success of public-private partnerships, because it reached the stated goal of resettling 100,000 refugees so quickly. The supply of US citizens volunteering to host Ukrainian refugees outstripped demand, demonstrating the support and enthusiasm of US citizens. Additionally, the Cato Institute argues that the policy empowered ordinary US citizens  because it largely removed the government from the refugee policy. The Cato Institute further argues that this policy should be a model for US refugee resettlement. Unite for Ukraine has limited bureaucracy and the form to apply to host a Ukrainian refugee is on one website, making the process easy for those willing to host.

    In the usual regular refugee resettlement system, displaced people register with the United Nations and are screened and vetted for security risks. The President decides on an annual refugee cap, and the UNHCR works with nine national nonprofit organizations in the US to resettle the agreed-upon number of refugees across the country based on factors such as medical needs, local support (i.e. family or community in the area), and linguistic resources. Refugees are put on a path to qualify for permanent residence in the US. The entire process, from registering with the UN to reaching the US, takes on average two years. In contrast, Unite for Ukraine moved more quickly.

    Policy as Weakness

    Some criticize the Biden Administration’s response to the Ukrainian refugee crisis as too slow. The plan was announced two months after war broke out. Some Ukrainians attempted to reach the US before the plan was announced via the border with Mexico. They now must go through the regular US immigration process rather than Unite for Ukraine because there is no provision in the policy to allow for Ukrainian resettlement from ports of entry. Some argue the response to Ukrainian refugees is hypocritical, when displaced people from Central and Latin America are not given the same treatment. At Unite for Ukraine was announced, the US-Mexico border was closed to asylum seekers due to Title 42. Similarly, the US has not mobilized to take in displaced people from other countries, like Venezuela, Sudan, and Afghanistan. One anonymous Democratic aide stated, “You see the president really highlighting how many refugees Poland has taken, and then on the same day, there’s a rollout to very actively reduce the number of people who can even access our asylum system.”

    In addition, the two year duration of the program has been met with some critique. The future of Ukrainian refugees resettled to the US through Unite for Ukraine is unknown. As a result, some companies are hesitant to hire refugees, which makes it difficult to find employment. In addition, Ukrainians qualify for one year of government assistance, which some also believe is too short when accounting for the numerous challenges refugees face when finding their feet in a foreign country.

    The Future

    As the war in Ukraine continues, the Biden Administration will need to make hard decisions about the future of the Ukrainian refugee program. Current provisions have a two year expiration, and the debate continues over whether the US should take in more Ukrainian refugees or focus on displaced people from other conflicts.

  • Pros and Cons of Enacting Supreme Court Term Limits

    Pros and Cons of Enacting Supreme Court Term Limits

    Background

    Article III Section 1 of the U.S. constitution outlines that Supreme Court justices are to “hold their offices during good Behaviour”, a phrase which framer Alexander Hamilton in Federalist No. 78 explained means “for life”. A justice can either die on the bench, retire, or be removed from office after committing an impeachable offense; otherwise, justices can remain on the Court as long as they please. Hamilton argued that life terms promote an independent court free from the influences of the political branches or the public, but his logic has been called into question numerous times throughout American history. Even before the constitution was ratified, Anti-Federalists attacked life terms for making the judiciary too independent, and calls for limiting life tenure emerged throughout the 19th and 20th centuries. This debate has rekindled within the last decade, raising questions about the Supreme Court’s alignment with principles of democratic governance. Two pieces of legislation, one from the House of Representatives and one from the Senate, were proposed in the previous session of Congress that would impose term limits for justices.

    Senate bill 4706 and House bill 8500, proposed by Democratic Senator Sheldon Whitehouse (RI) and Democratic Representative Hank Johnson (GA-4), would restrict the terms of Supreme Court justices to 18 years. They would also regulate the appointment process: each president would nominate only two justices in the first and third years of his/her term. Finally, they introduce a special brand of “senior status” to the Supreme Court. Justices that finish their 18-year term would retire from active duty, but still hold their office and receive full compensation. Proponents of term limits argue that relegating justices to senior status allows these statutes to skirt the constitutional provision permitting justices to serve for life. However, many proponents would also support a constitutional amendment to achieve the same ends. 

    Arguments for term limits

    Those who seek to enact term limits on Supreme Court justice center on three different observations/arguments: 

    1. The Court has lost its institutional legitimacy in the eyes of the public
    2. The Court’s current membership, its decisions, and the selection process have become excessively partisan
    3. All other high-functioning democracies have high courts with term limits

    Proponents of the bills believe the Court has grown increasingly out of touch with the American public in recent decades, and they cite a number of polls to back that assertion. They claim that most Americans say the Supreme Court is disconnected from modern values and beliefs, believe the Court makes its decisions based on the political leanings of justices rather than the rule of law, and lack confidence in the institution. A specific example of distrust in the Court is the widespread disagreement with the Court’s recent decision in Dobbs v. Jackson Women’s Health Organization, the ruling that overturned Roe v. Wade, and removed the constitutional right to abortion. They further emphasize that term limits have support across the political spectrum: 82% of Democrats, 57% of Republicans, and 51% of Independents called for term limits in one poll. 

    Why do Americans feel this way? Proponents point to two facts. Article II Section 2 of the U.S. constitution gives the president the power to appoint justices to the Supreme Court, who then must be vetted and confirmed by the Senate. Five of the nine justices on the current Court (all ideologically conservative) were appointed by presidents who lost the popular vote. Proponents argue, then, that such presidents, who do not reflect the will of the majority of Americans, will in turn nominate unrepresentative justices. This is part of a larger argument around political representation. Secondly, justices rarely die on the bench anymore and are serving longer terms than ever before. Since 1970, the average tenure of a justice has been 26.1 years—a significant increase from the average of 14.9 years before 1970. With less frequent vacancies on the Court, the appointment process, which acts as a democratic check on the Court’s membership, is less effective. 

    The second argument put forth by proponents of these bills is that term limits will help depoliticize both the ideological makeup of the Court as well as the appointment process. Donald Trump appointed three justices to the Court in just one term, while others like George W. Bush, who served two terms, only appointed two; Jimmy Carter appointed none. Supporters posit that giving each president only two spots to fill during a four year term would create a more equitable system that would help to ideologically balance the Court as party control of the White House changes, and ensure it more closely resembles public opinion. Proponents also contend that a more predictable system would put less pressure on each pick, serving to dial down the fervor of confirmation hearings, which have been a major source of partisan conflict.

    Finally, supporters of term limits argue that they would keep America in tune with other Western democracies who have similar policies. 46 states and Washington D.C. have term limits for members of their high courts; three others have age limits, and only Rhode Island permits life tenure. In these systems, after serving a term, a justice must be reappointed or re-elected, processes that work as democratic checks. Across the globe, countries like Australia, New Zealand, Israel, and the U.K. require justices to retire at age 70. Germany allows its federal judges to serve only 12 years. 

    Arguments against term limits

    Those who oppose the enacting term limits make three primary arguments: 

    1. Term limits would threaten the Court’s stability and independence
    2. Term limits would increase political polarization
    3. Term limits are unconstitutional. 

    The doctrine of stare decisis, which means “let the decision stand” in Latin, generally governs the Court’s jurisprudence. The legal model of judicial decision making argues that Court decisions are based on stare decisis and an adherence to precedent (previous rulings), the constitution, and applicable laws, which promotes stability and predictability. Opponents believe that the more regular shifting of the Court’s ideological makeup would wreak havoc on the stability of its legal doctrine. As an example, one study using computer simulations, assuming moderately loyal justices with no deference to precedent, estimated that if term limits existed from the beginning of the U.S., Roe would have been overruled and reinstated three times in just a few decades. Opponents believe that a regular influx of new justices will cause a fluctuation of precedent and turn the Supreme Court into a lawmaking body.  

    Furthermore, although many polls show that a majority of Americans support enacting term limits, opponents would argue that the Supreme Court was never meant to reflect the will of the majority. Instead, as Alexander Hamilton argued in Federalist No. 78, the Supreme Court’s greatest asset is its independence from the influence of the political institutions and the public. They say that the Supreme Court is meant to base its decisions on the Constitution, federal statutes, and, ultimately, the rule of law; therefore, supporters of term limits, who want to rein in an “out of touch” Supreme Court, are ignoring the very principles the institution was founded on.

    Opponents also argue that enacting term limits would intensify political polarization. For one, they say that an increase in turnover would merely increase the frequency of confirmation hearings and the partisan debate that accompanies them. They contend that presidential elections, with the knowledge that two Supreme Court seats would be tied to each four-year term, could devolve into a referendum on which individuals should be nominated to the Court. They point out that two-term presidents would be able to select 44% of the Court, and if a single party strung together three or four presidential terms, they could swiftly gain ideological control of the Court. All of this is assuming that the appointment process would go over smoothly, too. Opponents also argue that regularly staggered term limits would give a Senate controlled by the party opposite the president incentive to indefinitely delay or block justice confirmations, leaving the Court shorthanded. 

    Finally, opponents argue that the proposed legislation would be unconstitutional. They argue that the relegation of retired justices to a new form of senior status runs afoul to the constitutional provision allowing justices to serve “in good behavior.” Only a constitutional amendment could enforce term limits on Supreme Court justices, which is impractical in today’s political climate. Moreover, they suggest that allowing Congress to make such reform statutorily could empower it to alter the federal judiciary in other dangerous ways.

  • Introduction to US Relations with Panama

    Introduction to US Relations with Panama

    Source: GIS Geography 

    Panama was the first Spanish colony on the Pacific and is home to indigenous groups including the Guaymí, Kuna, and Chocó. The country is historically known for the Panama Canal, one of the world’s most used passages that cut down travel time between the Pacific Ocean and the Caribbean Sea. In 1903 Panama gained its independence from Colombia and became the independent Republic of Panama. 

    Fact Sheet 

    History of US-Panama Relations 

    Following independence from Colombia in 1903, Panama and the US officially established relations when they signed the Bunau-Varilla Treaty, allowing the US to build and operate a canal vital to global trade and national security. The key location of Panama and the Panama Canal made it a critical partner to the US in battling illegal drug trade. The US would eventually give Panama control of the Canal zone in 1979 and control and responsibility for the Canal to Panama in 1999. 

    Panama was strategically important to the United States during the Cold War, due to its proximity to the US, influence over the Panama Canal, and role in combating the illegal drug trade between North and South America. In 1968, a military coup took place and a new dictatorship came to power, led by General Omar Torrijos. The dictatorship was accused of numerous human rights violations and electoral fraud in subsequent elections. Initially, the US worked with the military dictatorship as a partner in the region. However, widespread protests began in 1988, and the US eventually invaded in 1989 to unseat the government, which was condemned by the international community. Many thousands of people were displaced by the conflict. 

    A democratically-elected, coalition government came to power following the end of the invasion. The US and Panama have continued to cooperate since 1989.

    US Strategic Interests 

    Corruption: The US stepped up efforts in recent years to combat corruption especially when it affects business and trade with the U.S. and other international investors, and has found a partner in current President Laurentino Cortizo. Corruption in Panama affects the justice system and the highest levels of government. The US accused former President Martinelli of falsely awarding government contracts, and arrested Martinelli’s two sons in 2018 on US soil for their role in a massive bribery and money laundering case. The Biden administration has since unveiled the first national security strategy memorandum focused on corruption. The National Assembly rejected Cortizo’s proposed constitutional reform package which would have allowed the Attorney General to investigate judicial and legislative leaders.

    Migration: Panama and the US recently signed a bilateral migration protection agreement with a focus on Panama’s southern border with Colombia. This border is a major pathway for irregular migration, with asylum seekers and migrants from South America crossing the border in an effort to reach Mexico or the United States. Cooperation on this front is twofold: the US aims to provide protection and resources for vulnerable migrants as well as support Panama’s border security efforts.

    US-China Tensions: China began investments in Panama in 2013 as part of the Belt and Road Initiative (BRI). This has raised concerns that Chinese companies may try to gain influence over the Panama Canal’s operations. The Panama Canal is considered highly important to the US economy. Panama’s key geographic position created a stronger trade relationship with China than many other Latin American nations share. However, President Cortizo suspended or canceled multiple Chinese investment projects, generating uncertainty about the future of relations with China and causing some setbacks for Chinese projects.

  • Introduction to the CHIPS and Science Act

    Introduction to the CHIPS and Science Act

    The CHIPS and Science Act of 2022 invests $52.7 billion to strengthen U.S. leadership in semiconductor research, domestic manufacturing, and workforce development. The U.S. currently produces 10% of semiconductors globally, with the Asia-Pacific region producing 75%. Semiconductors form the foundation of every advanced technology, from artificial intelligence to quantum computing. Many view semiconductor production as a national security issue, similar to ensuring a domestic food supply. Operationalizing the CHIPS Act would require onshoring of American manufacturing of semiconductors. Onshoring is the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated.

    What is the CHIPS Act?

    The CHIPS Act aims to encourage onshoring of American manufacturing in three main ways:

    • U.S. Leadership: The long-term goal of this legislation is to advance U.S. leadership in wireless technologies and their supply chains. U.S. national security priorities include the future of its economic competitiveness globally as well as domestic public investment in research and development.
    • Economic Growth: The CHIPS Act invests $10 billion in regional innovation, specifically in technology hubs that enables coordination among state and local governments with higher education as well as labor unions and businesses for the shared goal of technological advancements. 
    • STEM Development: Science, technology, engineering, and mathematics (STEM) education is essential for workforce development and meeting the demand for high-skilled jobs.

    According to the Semiconductor Industry Association, “the share of modern semiconductor manufacturing capacity located in the U.S. has eroded from 37% in 1990 to 12% today.” Additionally, Secretary of Commerce Gina Raimondo said the U.S. will need to triple the number of college graduates in semiconductor-related fields, including engineering. She discussed partnering firms in the semiconductor industry with high schools and community colleges to train over 100,000 new technicians over the next decade. The CHIPS Act strengthens research and development by establishing new regional innovation and technology hubs and investments in all levels of science, technology, engineering, and math education for students. This investment drives opportunity and equity with the diversification of research institutions and students as well as the researchers they serve, such as Historically Black Colleges and Universities (HBCUs) and other historically-underserved institutions. Students have the opportunity to play a crucial role in the future of U.S. leadership in technology.

    Arguments Against the CHIPS Act

    Opposition to the CHIPS Act is based on the idea that the U.S. government should not interfere in the free-market system. Federal interference may cause unintended disruption and unfair financial advantages for certain companies, while others suffer as a consequence. In addition, some believe the policy is limited in scope, in that it provides too little support for firms that design chips but do not manufacture them. Furthermore, opposition voices in the government object that creating a ‘blank check’ for the profitable microchip industry without guardrails could create a corporate free-for-all that attracts a wide range of businesses interested in obtaining funding. For corporations, the bid for funding is low-risk, high-reward and anything that touches a semiconductor could be eligible. Other opposition voices claim the federal spending generally “fuel[s] inflation that is hurting the poor and middle class.” Opposition voices within the federal government want the funds redirected elsewhere, since the microchip industry is already profitable. In 2021, the global market size was 527.88 billion USD.

  • The West Sanctions Russian Energy

    The West Sanctions Russian Energy

    West Sanctions Russia to Deter Aggression Against Ukraine

    The United States and its allies imposed sanctions on Russia when the country annexed Crimea from Ukraine in 2014. The US believed annexation threatened to reverse post-Cold War borders in Europe and endangered security, the rule of law, and human rights in Europe and beyond. However, the sanctions were limited in scope, and President Vladimir Putin ordered a full-scale invasion of Ukraine eight years later on February 24, 2022. This time a much stronger package of financial, trade and travel sanctions was imposed to curtail Russia’s ability to wage war and deny it access to finance and technology to upgrade its military capabilities. The sanctions froze much of Russia’s foreign reserves held abroad and targeted  oligarchs, financial institutions, export-oriented companies, and state actors. The energy sector was not sanctioned. According to the International Energy Agency (IEA), oil and natural gas exports made up 45% of Russia’s federal budget.

    Dependence and Disunity: the Challenge in Implementing Sanctions

    Infographic on US and EU energy dependence on Russia

    The United States is not a major consumer of Russian oil and gas, but decided not to implement energy sanctions because European allies depend on energy supplies from Russia. When asked whether the US was considering energy sanctions, Deputy National Security Advisor for International Economics Duleep Singh acknowledged at a White House press briefing, that “our measures were not designed to disrupt in any way the current flow of energy from Russia to the world.” At that time, rising domestic inflation and spiraling energy prices threatened the post-Covid economic recovery. The US Treasury prohibited financial transactions with Russian financial institutions, but included an exception for fossil fuel exports from Russia through “a general license to authorize certain energy-related transactions with the [Russian] Central Bank”.

    European countries were divided on energy sanctions. The EU as a bloc is highly dependent on Russian energy and receives 25% of its oil imports and 45% of its gas imports from Russia. European nations have found it more difficult to achieve energy independence because supplies from Russia are integrated into their energy infrastructure. Many EU members receive energy via pipelines connected to Russia, which take years to build.

    President Biden signed an Executive Order in March  2022, which broadened sanctions to the energy sector. He recognized that “we’re moving forward on this ban, understanding that many of our European Allies and partners may not be in a position to join us.” The US measures took immediate effect, prohibiting the import of Russian crude oil, petroleum and petroleum products, liquified natural gas and coal as well as any new US investment in the Russian energy sector. 

    On March 2, the European Commission applied sanctions against Russian financial institutions, but omitted two of the largest banks—SBERbank and Alpha Bank. The decision was likely taken to allow energy import payments. The US, on the other hand, sanctioned both banks and their subsidiaries. On June 3, the Council of the European Union adopted its 6th package of sanctions which targeted Russian oil and additional Russian banks, including SBERbank. EU members agreed in the 6th package to prohibit “the purchase, import or transfer of crude oil and certain petroleum products from Russia to the EU.” However, the sanctions will not be applied immediately, they will be implemented gradually; within six months for crude oil and eight months for other refined petroleum products.

    Hungary, the Czech Republic, and Slovakia raised concerns over the proposed energy embargo and urged the EU to extend the timeline or to allow other flexibilities. These countries negotiated an exception for the continued use of the Druzhba pipeline. Germany and Poland agreed to stop using oil from the Northern branch of the same pipeline. The EU noted that “as the majority of the Russian oil delivered to the EU is seaborne, these restrictions will cover nearly 90% of Russian oil imports to Europe by the end of the year.” So far, Russian gas has not been sanctioned.

    Impact of Sanctions

    The sanctions imposed after the invasion impacted the Russian economy immediately. The rouble plunged as overseas assets held by the Russian Central Bank were frozen. Key machinery and technology needed to maintain industrial production could not be imported. More than 1,000 foreign companies left the country, creating a vacuum of goods and services. Inflation grew, and prices for scarce items kept rising. The long-term forecast for the Russian economy was dire. However, the economy did not collapse, the rubble recovered after its initial dip, boosted by earnings from energy exports, because the majority of payments were done in rubles. Restrictions on Russian energy also impacted the economies of sanctioning countries. Reuters reported from Moscow on July 18 that President Putin claimed that “it was impossible to cut Russia off from the rest of the world, and that sanctions imposed by Western countries would not turn the clock back on Russia’s development.” 

    Russia withstood sanctions because the energy sector, its biggest source of export revenue, was able to operate freely for months following the invasion. Oleg Ustenko, the Chief Economic Adviser of the President of Ukraine, in an article in the Financial Times, criticized the energy sanctions since Russia still “can sell oil, gas and coal directly to every country except the US.” He added that “the measures the West has taken so far cover less than 5% of Russia’s pre-war crude oil exports.” In spite of this criticism, the energy sanctions have stopped new foreign investments in Russia’s energy sector, disrupted the flow of critical technology from the West that supports the fossil fuel industry, and caused a slow but gradual drop in Russian energy export volume. However, higher energy prices mean Russia can earn more from its energy exports than before the invasion.

    Increasing the Effectiveness of Sanctions

    Several strategies have been proposed and/or implemented.

    • The sixth EU package of sanctions prohibited EU operators from insuring and financing the transport of oil to third countries. This came into effect at the end of 2022. The United Kingdom and Norway joined the EU sanctions. The maritime insurance industry is concentrated in these two countries and Luxembourg—an EU member. If oil tankers are uninsured, Russia will be unable to ship oil by sea to major third party customers such as China, India and Turkey.
    • The US Treasury Department is considering implementing a price cap on Russian oil to ensure that revenue from energy exports goes down while global supplies remain stable. This has not gained traction among the G7 and EU countries. 
    • It would be possible to implement secondary sanctions on countries which purchase Russian energy. However, this strategy has also failed to gain traction.

    Despite their limitations, the current sanctions will have long-term impacts on the Russian economy. The West is counting on the sanctions to gradually bring Russia to the negotiating table, while the Russian government is counting on waning public support in the West.

  • Introduction to Corporate Average Fuel (CAFE) Standards

    Introduction to Corporate Average Fuel (CAFE) Standards

    Overview of CAFE Standards

    Corporate Average Fuel Economy (CAFE) standards are government-set standards regulating how far vehicles should be able to travel on a gallon of fuel. The three different classifications of vehicles, light-, medium-, and heavy-duty, have different CAFE standards. Higher standards mean vehicles should be able to travel further on a single gallon of fuel. CAFE standards for light-duty vehicles are the most relevant to the average consumer, as the category includes passenger cars and light trucks. The standards are set and enforced by the National Highway Traffic Safety Administration (NHTSA) under the Department of Transportation. The Environmental Protection Agency (EPA) calculates average fuel economy levels and sets greenhouse gas emissions standards that accompany CAFE standards.

    CAFE standards aim to increase fuel efficiency in vehicles and reduce total energy consumption. They are thought to improve the nation’s energy security, save consumers money, and reduce greenhouse gas emissions. 

    Recent Policy History

    CAFE standards were first established by Congress in 1975 under the Energy Policy and Conservation Act. They were primarily created in response to the 1973 oil embargo, which posed challenges to the foreign oil-dependent U.S. economy. Congress hoped CAFE standards would double the average fuel economy of new vehicles by 1985 and reduce the country’s dependence on foreign oil imports. Standards then remained largely unchanged until the Energy Independence and Security Act of 2007. The legislation, passed under the Bush administration, raised the fuel economy standards of light-duty vehicles to an average of at least 35 miles per gallon over the next 10 years. 

    In the early 2000s, higher levels of driving and an increased market share of less-efficient SUVs and light trucks contributed to increased oil consumption in the U.S. To combat this, the Obama administration worked with the auto industry to create a two-phase national program to increase fuel efficiency and create greenhouse gas emissions standards for light-duty vehicles. The program is governed by the NHTSA, which oversees CAFE standards, and the EPA, which sets greenhouse gas emissions standards. 

    However, many of the standards set under the Obama administration were rolled back by the Trump administration. In place of CAFE standards, the Trump administration created Safer Affordable Fuel-Efficient (SAFE) standards to give manufacturers more freedom and reduce the quality-adjusted prices of vehicles by an average of $2,200. While SAFE 1 still increased fuel economy standards, it did so at a slower rate than the standards proposed by Obama’s administration. SAFE 1 also proposed that manufacturers comply with the standards by focusing on greenhouse gas emission standards because of the subsequent ability to help reach CAFE standards. SAFE 1 ultimately sought to loosen the annual fuel efficiency increase from 5% to 1.5% through 2026.

    SAFE 1 has since been repealed by the Biden administration for overstepping the agency’s legal authority and for not taking local and national interests into account. Under the new administration, the NHTSA finalized CAFE standards for model years 2024-2026 on March 31, 2022. These recently passed standards require about 49 miles per gallon for all light-duty vehicles by 2026 by increasing fuel efficiency by 8% annually for the years 2024 and 2025, and 10% annually for the year 2026.

    Arguments for CAFE standards

    The NHTSA has found that the recently set CAFE standard of 49 miles per gallon can save consumers nearly $1,400 in total fuel expenses over the lifetime of compliant vehicles and save 234 billion gallons of gas between 2030 and 2050. They’ve also found that the standards reduce greenhouse gas emissions, air pollution, dependency on oil, and will diversify energy usage to increase energy security. The Department of Transportation states that CAFE standards will increase the availability of alternative fuel vehicles and promote the advancement of innovative technologies.

    Scholars argue that CAFE standards have kept U.S. gasoline consumption at a low annual growth rate of 0.2% a year, playing a crucial role in reducing oil imports and dependency. In general, they estimate that the standards have saved consumers two trillion gallons of gasoline since first established. They also argue that these regulations are more effective than a gas tax because they move responsibility and decision-making from the consumer to the manufacturer. This prompts manufacturers to use technology to make their products more fuel-efficient and eventually save consumers money on fuel, despite higher initial costs. On average, a more fuel-efficient vehicle costs $4,800 more than current models, but the savings from reduced fuel consumption are almost four times the additional cost. 

    The Alliance to Save Energy also argues that the standards save consumers money, predicting that by 2025 consumers will have received roughly $8,200 in net savings over the life of the vehicle. Altogether, this results in $1.7 trillion in savings nationwide. In addition, buyers of 2017 vehicles are expected to save money more than 94% of the time, given that ¼ of all new model year 2017 cars would have greater fuel economy and cost less than their 2011 counterparts. On a national scale, the standards are also thought to enhance U.S. competitiveness. Innovative vehicle manufacturers have a first-mover advantage, helping them achieve greater economies of scale and benefit from technological learning. 

    Arguments Against CAFE Standards

    Alternatively, the Heritage Foundation found that to compete with foreign automakers, manufacturers will have to move production oversees, putting thousands in the auto industry out of jobs. This negative economic impact is compounded by the fact that CAFE standards are only cost-effective if fuel prices are high. Without high fuel prices, the cost of research and development and replacing low-efficiency vehicles outweighs the financial benefits of more fuel-efficient vehicles. In addition, CAFE standards may incentivize reducing the weight and steel content of a vehicle, leading to more unsafe cars and designs and increased fatalities. 

    There are a few challenges facing CAFE standard implementation, including the time horizon over which these policies take effect. Since standards apply only to new vehicles, it can take a long time for the full effects to be realized. It currently takes about 15 years for the benefits of CAFE standards to truly take effect and permeate the entire vehicle fleet. It is also difficult to understand the full long-term impact of fuel efficiency on emissions because of the potential for the “rebound” effect, which occurs when greater fuel efficiency encourages more driving, subsequently offsetting any emission reductions resulting from the standards. Another pressing challenge is the lack of coherency in CAFE standards across administrations.