We work with the best scholars from around the country on the nation’s most difficult public policy problems.
Our mission is to find private alternatives to government programs that aren’t working.
Ideas have enormous potential to change the course of human events. What follows are some examples.
Turning Ideas into Public Policy
While working at the National Center for Policy Analysis, John Goodman and Gov. Pete du Pont led the effort to bring about these changes at the federal level:
- Because of the idea of Health Savings Accounts, more than 30 million people are managing some of their own health care dollars in accounts they own and control.
- Because of the idea of Roth IRAs, $265 billion in savings has been taxed once and will never be taxed again.
- Because of another idea, 78 million baby boomers are able to work beyond age 65 without losing Social Security benefits.
- Because of an initiative with the Brookings Institution, half of all future 401(k) participants will be automatically enrolled in a diversified portfolio enjoying higher and safer returns.
Here are two significant changes Dr. Goodman helped bring about at the state and local level:
- In 1984, Madsen Pirie and John Goodman brought Margaret Thatcher’s techniques of privatization to the United States through two books and a Washington, DC conference for other think tanks. These and other activities led to a privatization revolution in this country.
- In 1990, a Goodman-led task force report on school choice spurred Pat Rooney to start the nation’s first private school voucher program. What followed was an explosion of private vouchers and charter schools throughout the country.
Here are two bad ideas Dr. Goodman helped stop:
- His efforts to promote a Health Savings Account alternative to Hillary Care in 1994 are credited as a key reason for the defeat of health reform that year.
- Studies of taxes on the elderly by Dr. Goodman and his colleagues and their communications with the senior media are credited as the key reason for the repeal of a Medicare drug benefit enacted in 1989 – an historic Congressional reversal of a law that was less than one year old.
Milestones in the War of Ideas
- John Goodman’s classic debate at Slate with liberal columnist Michael Kinsley is the strongest case ever made for not taxing capital gains.
- John Goodman’s presentation at Howard University Law School (the oldest historically black law school in the country) is probably the best case ever made for school choice.
- John Goodman’s Health Affairs article with Wharton economist Mark Pauly shows the best role for government in health care: tax credits and Roth Health Savings Accounts. Almost all health economists, both left and right, have endorsed this approach and tax credits are the centerpiece of almost all alternatives to Obamacare.
- John Goodman’s book with Gerald Musgrave, Patient Power, shaped and molded right-of-center thinking on health care for almost 25 years – from Paul Ryan to Newt Gingrich to Sean Hannity and others.
- Goodman’s new book Priceless is equally revolutionary and has won praise from almost everyone in heath policy.
- In the 1990s, Jeanette Goodman (representing the NCPA) and Warren Stiebel teamed to produce 18 PBS-aired Firing Line debates and five two-hour primetime William F. Buckley Firing Line programs — bringing such ideas as the flat tax, Health Saving Accounts, welfare reform and school choice to a national television audience.
- In a continuing effort, Ms. Goodman and Mr. Stiebel produced 22 one-hour DebatesDebates programs, introducing some of the best scholars with the best ideas to a national television audience.
- In 2009, Jeanette Goodman organized the Free Our Health Care Now! Campaign, protesting the nationalization of health care. With 1.35 million American signatures the effort produced the largest online petition ever delivered to Congress.
- Subsequently, the program hosted 1.2 million emails from constituents to members of Congress, leading up to the vote on ObamaCare. This effort was responsible for more than one third of Diane Feinstein’s negative mail on the bill.
- John Goodman’s book Living with Obamacare is selling in Hudson Bookstores in airports around the country.
Other Innovative Ideas
Here are seven more original ideas that are very much part of the public policy debate:
- “Taxpayer Choice” would let taxpayers allocate their share of the welfare spending to charities of their own choosing.
- “Enterprises Programs” would allow entrepreneurs who are meeting essential needs of low-income families to be freed from many traditional cost-increasing regulations.
- The Kotlikoff/Goodman reform of the financial system would end the borrow-short, lend-long approach to banking that inherently subjects the credit market to the risk of financial panics.
- The Kotlikoff/Goodman flat tax would tax only consumption, not investments or savings, and it is more progressive than the current system.
- “Factories Behind Bars” would let prisoners have access to the job market, where they would learn useful skills instead of learning how to be better criminals.
- “Divorce by Contract” is a highly original solution to America’s broken family court system and its dysfunctional system of child support.
- “Liability by Contract” is a radically new approach to tort law – one that would make hospitals safer, give providers strong economic incentives to avoid errors and compensate victims without lawyers, judges and juries.
Tackling the Problem of Social Insurance
Working with highly sophisticated economic models, our scholars have discovered how to privatize our most expensive entitlement programs:
- Former Social Security Trustee Thomas Saving and his colleagues at Texas A & M have shown that if workers and their employers put 5 percent of payroll in an account every year, after one generation the taxpayer burden of Social Security will be no greater that it is today.
- Dr. Goodman, using a Texas A & M model, showed that if workers deposited 4 percent of payroll in a health retirement account, after one generation the burden of Medicare would be no greater than it is today.
- Former World Bank economist Estelle James has shown that we could cut the cost of our disability system in half by adopting the Chilean system.
- Economists Bill Conerly and Michael Helvacian have shown that privatization of our unemployment insurance and our worker’s compensation system could better meet worker’s needs at a much lower cost.
Economists have spent an enormous amount of time and energy trying to understand why markets sometimes fail. They have devoted very little effort to understand why government policies fail. Yet the key to successful public policy innovation is understanding why governments do what they do. This has been a central focus of Dr. Goodman’s academic career and has guided his work in the think tank world for more than 30 years:
- John Goodman’s essay on “Public Choice” is the clearest statement found anywhere on why government policies fail to achieve optimal results.
- Dr. Goodman and University of South Florida economist Philip Porter have produced a technical journal article showing why regulation fails.
- They have also produced a technical journal article showing why government spending programs fail.
Former Senator Phil Gramm says that two individuals made Health Savings Accounts possible: John Goodman and Pat Rooney. Dr. Goodman was president of the National Center of Policy Analysis at the time. Mr. Rooney was an NCPA board member and CEO of Golden Rule insurance company. Together, they made a major effort to convince key members of Congress to allow a pilot program for this innovative idea in 1996. Dr. Goodman also met with the senior executives of Golden Rule and the company tried out the first Health Savings Account plan on their own employees. It was so successful that Golden Rule began marketing the product to other employers, even before there was any tax advantage.
Legislation passed in 2003, made HSAs in principle available to the entire population of privately insured individuals and families. (See A Brief History of Health Savings Accounts.) A few years later, the Treasury Department approved Health Reimbursement Arrangements (HRAs), a similar concept, for employers. About half of those with private accounts have HSAs and the other half have HRAs.
The Roth IRA and the elimination of the Social Security earnings test were part of a package of five pro-growth “tax ideas” proposed by the NCPA and endorsed by the U.S. Chamber of Commerce in the early 1990s. The proposal was created by Dr. Goodman, Gary and Aldona Robbins and Richard Rahn (chief economist of the Chamber of Commerce at the time). Because of his close relationship with Newt Gingrich, Gov. Pete du Pont was instrumental in making these five ideas the core tax package in the 1994 “Contract with America.”
The 401(k) reform was due to the joint efforts of Dr. Goodman, Gov. du Pont and Peter Orszag, while he was at the Brookings Institution and before he became chief economic advisor to President Obama. Dr. Orszag approached Dr. Goodman and asked for his help in reforming the 401(k) law — to give employees higher returns and safer returns. What followed was a series of bipartisan briefings on the House and Senate side, with Gov. du Pont serving as chair. The reforms were made part of the pension reform bill of 2006. (See Reinventing Retirement Income in America.)
The 1984 NCPA book, Dismantling the State, described Margaret Thatcher’s 22 techniques of privatization. A follow up publication, John Goodman’s Privatization, described the results of a Washington, DC conference at which the NCPA and the Adam Smith Institute of London presented the techniques of privatization to the American public policy community. Over the next two decades there was a privatization revolution at the local level in the United States.
The NCPA task force report recommending school choice was organized by Dr. Goodman and included some of the top education researchers from around the country. Based on that report, NCPA board member Pat Rooney started a private school voucher program in Indianapolis for low-income families — a model that spread to more than 30 cities in less than a decade.
In 1989, John Goodman and Gary and Aldona Robbins produced a series of studies showing that a recently passed Medicare surtax not only applied to wages, it also reached capital gains and even tax exempt bonds. These studies got enormous media attention. Milton Friedman, The Wall Street Journal and others credit them with causing the ultimate repeal of the Medicare Catastrophic Coverage Act.
In his book Whitewash, Brent Bozell credits three people with the defeat of Hillary Care: Sen. Phil Gramm, Bill Kristol and John Goodman. Sen. Gramm invited Dr. Goodman to meet with fellow Republican senators and introduced them to Goodman’s idea of Health Savings Accounts. After HSAs became a core idea in the Republican alternative health care bill, enough senators signed on to stop Hillary Care in the Senate and keep it from becoming law.
References to most of the other documents referred to here can be found in “Our History.”