Morning Brief: Task Force Issues Report on Education Challenges, Reforms

The CFR Independent Task Force on U.S. Education Reform and National Security released its report describing the threats posed to U.S. prosperity, security, and preeminence by a failing K-12 education system. Without an effective education, many future U.S. citizens will be unable to compete in the global economy, understand domestic policies and foreign affairs, or serve the nation’s foreign service and military needs, said the report, which was co-chaired by former Secretary of State Condoleezza Rice and former New York City Schools Chancellor Joel Klein.

The Task Force made three central policy recommendations: implementing educational expectations and assessments in subjects vital to protecting national security such as science, technology, and foreign languages; making structural changes to provide parents with more school choices for their children; and launching a “national security readiness audit” to raise public awareness and hold schools and policymakers accountable.

U.S. Firms Struggle to find Employees for the Digital Age

While the unemployment rate in the United States remains high, companies are struggling to hire employees well versed in digital technologies (Harvard Business Review). As information technology revolutionizes industries from finance to manufacturing and retail, firms need to find talent to meet the innovation challenges of a changing world. While most American firms are investing in employee training to bridge skill gaps, the government has a duty to develop a labor force that meets the needs of 21^st century businesses.

Education and human capital. Read more from experts discussing ways to improve U.S. education and immigration policies.

Commerce Department Levies Small Tariffs on Chinese Solar Imports

The U.S. Commerce Department imposed modest tariffs on imports of solar panels from China, responding to allegations by U.S. solar panel makers that their Chinese competitors are unfairly subsidized. The duties, which could be imposed retroactively, range from 2.9 to 4.73 percent, but are unlikely to slow the rapid growth of solar installations in the United States. U.S. makers of solar panels, led by SolarWorld, which has a large production facility in Oregon, had been hoping for more punitive duties to reduce their declining market share. A second Commerce Department decision on whether Chinese solar panels are being “dumped” in the U.S. market below cost is due in May.

Senate Blocks Reauthorization of Export-Import Bank

The Senate yesterday blocked the reauthorization of the U.S. Export Import Bank, leaving the future of the agency uncertain. Republicans united to defeat a Democratic amendment to a popular small business bill that would have renewed the agency for four years and raised its financing cap from $100 billion to $140 billion. The bank has played a key role in the Obama administration’s efforts to double exports over the five-year period to 2014 as part of its National Export Initiative. The bank’s authorization runs out in May, but it could hit the financing cap in the next few weeks. Some Republicans are seeking to rein in the bank’s lending, and prospects for passage of a stand-alone bill are uncertain.

CFR’s Edward Alden argues for Congress to reauthorize the Ex-Im Bank and expand its lending authority in this blog post

Peter Orszag Advocates Re-pricing of Water

In his Bloomberg column, former OMB Director and CFR adjunct senior fellow Peter Orszag says Atlanta’s two decade water conflict with Alabama and Florida foreshadows future water conflicts. As aquifer levels fall and pollution sours other sources, freshwater supplies will not keep up with demand. Orszag advocates adjusting water pricing to reflect usage, to raise awareness of water issues and to fund needed improvements. The American Society of Civil Engineers believes an additional investment of $9.4 billion annually through 2020 is required to fix water and sewage systems(WashPost); the U.S. water system’s 700,000 miles of pipes averaging sixty years of age are estimated to leak 25 percent of drinking water.

Infrastructure. Read more on how upgrading the nation’s aging network of roads, bridges, airports, railways, and water systems is essential to maintaining U.S. competitiveness.

Californians Prepare for Dueling Tax Reform Ballot Initiatives

As debate continues to rage about the federal deficit, many states are struggling to close their own yawning budget holes. The Economist describes a ballot initiative battle between California’s Democratic governor, Jerry Brown, and Molly Munger, civil-rights lawyer and wealthy daughter of Charlie Munger, Warren Buffett’s longtime business partner. Both proposals raise taxes. Brown’s proposal temporarily raises sales taxes and income taxes on the affluent to balance California’s budget over the next five years. Munger’s measure would permanently raise income taxes more broadly, largely to fund education. Brown recently won the support of the California Federation of Teachers, but we will have to wait until the November vote to see which—if any—proposal wins the approval of Californians.

Debate continues over the 2013 budget plans announced by the Obama administration and GOP leaders. This CFR Backgrounder outlines the competing policy paths on federal fiscal reform, and the global consequences for failing to bring down U.S. debt.

Debt and deficits. Read more from experts on the challenges in reducing U.S. debt.

Steven J. Markovich holds an MBA from the University of Chicago’s Booth School of Business.