Three Ways the New Overtime Regulations Will Hurt Employees

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President Obama has introduced new overtime regulations as a way to raise wages. In reality, the new regulations, which give many salaried employees overtime benefits, will hurt workers more than they will help.

Heritage labor expert James Sherk explains three ways the regulations will hurt employees:

  1. Base salaries will fall. Employers will compensate for paying overtime hours by reducing the base pay by an amount equal to the new overtime eligibility. Average hourly pay — including overtime — will remain unchanged.
  2. Employees will lose flexible working hours. Overtime regulations mean workers have to track their hours. Instead of taking off work early and making up for it later, employees will have to work within a specific time frame.
  3. Employers will forbid overtime-eligible employees from working remotely. Working from home will be discouraged because it is a legal risk for employers, who now have to precisely calculate each employee’s overtime liability.

The new overtime regulations may be good for President Obama’s approval ratings, but not for the five million professional employees who are losing flexibility at work without getting paid any more.

How do you think the new regulations will affect your family?

Why Greece’s Financial Collapse May Not Be a Tragedy in the Long Run

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Greece’s financial collapse offers the country an opportunity to move away from the socialist system that led to its ruin. Heritage’s expert Stephen Moore explains why Greece cannot afford to take another bailout to support its socialist system:

The big lie is that Greece has already lived through austerity.  This is a nation that in 2013 was spending up to 59% of  its GDP on government benefits and programs. Even today the government accounts for half of all spending. How is that austerity?  The problem is as the private economy shrinks, the government’s role keeps expanding.  Greece’s debt was 120% of GDP a decade ago, and now its 175%.  This is the opposite of austerity.  It is a spendfest.

Bankruptcy and default will force everyone to take a hit. While it may seem unfair to cut pensions and welfare benefits, it would be unjust to force young Greek citizens to pay exorbitant taxes to pay for the sins of their fathers and grandfathers. Declaring bankruptcy is not a tragic end for Greece, it is the beginning of a stronger economy.

What do you think? Tell us in the comments.

Why Congress Is Finding Common Ground on Criminal Justice

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There is a widespread understanding that the two major American political parties are generally incapable of agreeing on any major policy change. But even in this political atmosphere, lawmakers are willing to reach across the aisle for criminal justice reform.

Heritage expert Paul Larkin explains why Republicans and Democrats are rallying behind proposals to redefine “regulatory crimes,” which penalize unintentional violations:

No one should be convicted of a crime if no reasonable person would have known, and if the defendant did not know, that the conduct charged against him was criminal…

Hundreds of thousands of statutes and regulations impose criminal liability and threaten to make felons out of people who try to comply with the law but trip over one or more technical rules that can serve as the basis for a criminal charge. A criminal code that cuts such a wide swath and reaches people who engage in conduct that no reasonable person would find blameworthy weakens both public respect for the law and the public’s willingness to support its enforcement.

The courts have been unwilling to examine this issue, but there now is hope that Congress will take up the task of reining in the absurd number of criminal laws on the books.

Do you think that regulations should be enforced in the same way as ordinary criminal offenses?

Why Obama’s New Climate Regulations Are Not Worth the Cost

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This summer, the Obama administration will finalize new climate regulations targeting coal-fired power plants. These will cause a rise in energy prices across the nation, a cost Heritage expert Nick Loris explains is unjustified:

Higher energy bills for families, individuals, and businesses will destroy jobs and strain economic growth—and it will all be for naught. No matter one’s belief on the climate effects of man-made greenhouse emissions, the regulations will have a negligible impact—if any—on global temperatures.

In fact, an analysis using the EPA’s own climate model suggests the regulations will avert a meager –0.018 degree Celsius of warming by 2100. Instead, President Obama’s climate plan will have a chilling effect on the economy, not the climate. The costs by 2030 include, Loris estimates:

  • An average annual employment shortfall of nearly 300,000 jobs;
  • A peak employment shortfall of more than 1 million jobs;
  • A loss of more than $2.5 trillion (inflation-adjusted) in aggregate gross domestic product (GDP); and
  • A total income loss of more than $7,000 (inflation-adjusted) per person.

Now is the time for lawmakers and state officials to exercise their leadership and reclaim the authority President Obama has given to the unelected bureaucrats who decide these environmental policies.

Do you think Congress is doing enough to challenge regulations that threaten economic growth and individual freedom?

How Heritage Has Changed the Debate on Education Reform

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Since the No Child Left Behind Act passed in 2001, conservatives have been working to provide alternatives to the contentious legislation.

Since 2007, Heritage has urged lawmakers to consider the A-PLUS Act, which would restore state and local control over education. Heritage’s Lindsey Burke explains the bill’s aims:

  • To give States and local communities maximum flexibility to determine how to improve academic achievement and implement education reforms.
  • To reduce the administrative costs and compliance burden of Federal education programs in order to focus Federal resources on improving academic achievement.
  • To ensure that States and communities are accountable to the public for advancing the academic achievement of all students, especially disadvantaged children.

After the A-PLUS Act was first introduced by then-Sen. Jim DeMint (R-SC), Sen. John Cornyn (R-TX), and Rep. Pete Hoekstra (R-MI), Heritage has worked steadily to educate lawmakers on its importance.

And yesterday, when the A-PLUS Act was presented as an alternative to reauthorizing No Child Left Behind, it received 195 votes, with support from more than 80 percent of the Republican conference.

Although it did not pass, yesterday’s vote established A-PLUS as the overwhelming consensus position of the Republican Party. Because of the work Heritage has been doing, there is now overwhelming support in Congress for a conservative alternative to No Child Left Behind.

Do you think it’s time to replace No Child Left Behind?

Why Bailouts Are Not the Solution to Puerto Rico’s Problems

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ALVIN BAEZ/Reuters/Newscom

With large deficits and a collapsing economy, it came as no surprise that Puerto Rico’s Governor Alejandro García Padilla announced that “the debt is not payable.” Congress will be tempted to focus on only the short-term consequences of debt resolution and bail out the American territory.

But any hope for future economic growth in Puerto Rico lies in economic freedom, not the moral hazard of continued bailouts.

Heritage experts Salim Furth, James Roberts, Mike Gonzalez, and Norbert Michel explain why Puerto Rico needs limited government, not more bailouts:

Puerto Rico has been a “paradise” of progressive economic policies, but high minimum wages, strict overtime rules, generous employment and welfare benefits, high energy costs, and protective business regulations have harmed the very people the policies were intended to help.

Puerto Rico is responsible for many of the policies that have sunk its economy, but in a few cases Congress needs to act to free the island. Instead of giving Puerto Rico bailouts, Congress should:

  1. Permanently exempt Puerto Rico from the Jones Act. Relief from the Jones Act, which imposes onerous restrictions on shipping to and from the island, would allow the cost of living on Puerto Rico to decline.
  2. Exempt Puerto Rico from the federal minimum wage. The minimum is much higher relative to Puerto Rican wages than mainland wages. Eliminating the federally mandated minimum wage for Puerto Rico would encourage economic growth and help the market create much-needed jobs.
  3. Give Puerto Rico more flexibility to administer federal grants for welfare. Reforms of the island’s welfare programs are badly needed, but require the cooperation of commonwealth and federal policymakers.

Without freedom from these policies, the Puerto Rican government will have no other choice but to continue to turn to Congress for bailouts.

Do you think government regulations have choked your local economy?

What Obama’s Vision of Trade Really Means

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President Obama has been making the case for new trade deals, and he’s right to do so, Heritage expert Ted Bromund explains. But his argument for trade deals, based on a vision of American decline, is entirely wrongheaded.

For the first time, a U.S. president is making the case for trade agreements by arguing that we’re in decline …

There’s just enough sense in this idea to make it dangerous. It’s true that, as the rest of the world grows, the U.S. and European share of the pie will likely shrink. But if the president is right that China will someday be so powerful that it can write the global rules of trade on its own, a new U.S. trade agreement is a pitiful response …

The chances are that Obama is wrong. China’s economic growth is slowing, and even the United States at the peak of its relative strength — after 1945 — didn’t have the power to write the rules of trade on its own.

This vision runs the risk that future trade deals will restrict commerce and impose new burdens on free enterprise. But “new trade agreements that focus on imposing even more rules aren’t the answer,” Bromund argues. “They’re the problem. They’re also not free trade.”

New trade agreements should be about getting government out of the way and creating future opportunities.

Do you think America needs to loosen restrictions on free enterprise?

What an Iran Deal Means for Nuclear Proliferation

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Photo: Carlos Barria/Reuters/Newscom

 

It is no surprise that the arbitrary June 30 deadline set for concluding the Iran nuclear talks wasn’t met. Heritage expert Jim Phillips explains that the talks stalled in part because the Obama administration is more eager to make a nuclear agreement than Tehran seems to be.

Any deal would also undermine America’s stance against proliferation of nuclear weapons. “Giving ground on the policy of proliferation and making an exception for [Iran] would be going back on our allies we have asked not to have any,” Georgetown University’s Matthew Kroenig said in a panel discussion at Heritage.

The United States should adjourn the talks until Tehran is willing to make the necessary concessions to guard against possible nuclear proliferation.

Do you think that Obama’s administration is just giving in to Iran?

Ted Cruz’s Four Examples of Cronyism in Washington

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Photo: Steven Purcell

Speaking at The Heritage Foundation this morning, Sen. Ted Cruz (R-TX) denounced cronyism in both the Republican and Democratic parties. He called it a “Washington cartel” and identified four programs that are symptoms of big-government cronyism in Washington:

  1. The Export-Import Bank hand-picks which well-connected companies the government will give billions of taxpayer dollars in loans to.
  2. Renewable-energy mandates distort energy prices and benefit special interests like corn farmers.
  3. Sugar subsidies inflate the prices of food and cost food-manufacturing jobs for the benefit of a small group of farmers.
  4. The proposed internet sales tax threaten to diminish the opportunity of small business to use the internet to compete with large companies.

How do you think cronyism in Washington is hurting our country? 

7 Reasons Why Congress Should Not Raise the Gas Tax

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If OPEC (Organization of the Petroleum Exporting Countries) can’t keep gas prices high, our government will: liberals have proposed hiking the federal gas tax.

House minority leader Nancy Pelosi argued that motorists might not even notice the hike. “If there’s ever going to be an opportunity to raise the gas tax, the time when gas prices are so low — oil prices are so low — is the time to do it,” she said.

In a testimony this week before the Senate Finance Committee, Heritage expert Stephen Moore offered several reasons why there is no need to increase the federal gas tax. Here are seven of them:

  1. For every 1 cent increase in the gas tax, $1.5 billion is taken away from American consumers.
  2. At a time of stagnant wages, a gas tax hike serves as a negative stimulus.
  3. Lower gas prices will actually increase government revenue because people more will drive more with lower prices. People then purchase more gas, and the per-gallon tax sends more money to the government.
  4. The gas tax was originally implemented to build the interstate highway system, which was completed 30 years ago.
  5. States have raised their own taxes and funding to maintain roads in their areas. State spending on roads has tripled since 1984. At the same time, the population has only grown by one-third.
  6. More than 25 percent of the funds from the federal gas tax are directed towards non-highway projects like bike paths, hiking trails, or museums.
  7. To ensure current gas-tax revenue goes further, Congress can lower the costs of construction by up to 20 percent by repealing the federal Davis Bacon Act, which requires effectively a union “prevailing wage” be paid on federal construction projects.

What reasons would you give Congress not to hike the gas tax?

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