25-26 April 2018, Tokyo - This event will bring together key stakeholders from the Asia Pacific region to discuss policy issues relevant to the sound development of insurance and private pensions markets.
The roundtable offers a forum for regulators, policy makers, experts, practitioners, scholars and international organisations in Asia. This year’s edition will focus on recent developments in capital markets and on capital markets of the future.
25-26 January 2018 - The first annual meeting of the G20 Global Infrastructure Connectivity Alliance will bring together policy makers and practitioners to discuss the state of play in global connectivity, innovative practices and the outlook for connectivity.
On Monday, June 2, the U.S. Department of the Treasury and the Center for Strategic and International Studies will co-host a symposium entitled “[email protected]: The Evolution of Treasury’s National Security Role,” marking the 10th anniversary of the Office of Terrorism and Financial Intelligence (TFI). Secretary Jacob J. Lew will deliver remarks on the Department’s role in advancing U.S. national security and foreign policy and the event will convene senior Administration officials, former government and Congressional leaders, and other foreign policy experts in academia and the private sector to discuss the future of financial tools, financial transparency, and financial intelligence as a means of advancing our national security. The symposium recognizes TFI's important work to disrupt and dismantle the financial networks of terrorist organizations, proliferators of weapons of mass destruction, drug traffickers, and transnational organized criminals as well as to protect the U.S. financial system from abuse. Since its establishment in 2004, TFI has marshalled the Department’s intelligence, regulatory, policy and enforcement authorities to combat the most significant threats to U.S. national security and advance key foreign policy objectives. Below are additional details on the impressive speakers and panelists that will be participating. The whole event will be broadcasted live on USTREAM here. Monday, June 2, 2014 Center for Strategic and International Studies (CSIS), Washington, DC 8:40 a.m. Introductory Remarks David S. Cohen Under Secretary for Terrorism and Financial Intelligence, U.S. Department of the Treasury 8:45 a.m. Morning Keynote Jacob J. Lew Secretary, U.S. Department of the Treasury Introduction: John J. Hamre President, CEO, and Pritzker Chair, CSIS 9:05 a.m. Panel I: Leveraging Financial Tools to Advance National Security Tom Donilon Distinguished Fellow, Council on Foreign Relations Former National Security Adviser Stephen Hadley Chairman of the Board, U.S. Institute of Peace Former National Security Adviser Moderator: Andrea Mitchell Chief Foreign Affairs Correspondent, NBC News 10:15 a.m. Morning Remarks Stuart Levey Chief Legal Officer, HSBC Holdings plc Former Under Secretary of the Treasury for Terrorism and Financial Intelligence 10:30 a.m. Panel II: Financial Intelligence: Redefining and Reshaping National Security Keith Alexander Former Director of the National Security Agency Jane Harman Director, President, and CEO, Wilson Center Former Representative (D-CA) Michèle Flournoy CEO, Center for a New American Security Former Under Secretary of Defense for Policy Moderator: David Sanger Chief Washington Correspondent, The New York Times 11:30 a.m. Midday Keynote Denis McDonough White House Chief of Staff 12:30 p.m. Panel III: Increasing Financial Transparency and Protecting the U.S. Financial System Neal Wolin Former Deputy Secretary of the Treasury Reuben Jeffery III Senior Adviser, CSIS; CEO, Rockefeller & Co. Former Undersecretary of State for Economic, Business, & Agricultural Affairs Moderator: Juan Zarate Senior Adviser, CSIS Former Deputy National Security Adviser Former Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes 1:30 p.m. Closing Remarks David S. Cohen Under Secretary for Terrorism and Financial Intelligence, U.S. Department of the Treasury Anthony Reyes is the New Media Specialist at the United States Department of the Treasury.
Introduction In 2015, the Department of Education launched the College Scorecard, a vast database of student outcomes at specific colleges and universities developed from a variety of administrative data sources. The Scorecard provides the most comprehensive and accurate information available on the post-enrollment outcomes of students, like whether they get a job, the rate at which they repay their loans, and how much they earn. While labor-market success is certainly not the end-all-be-all of higher education, the notion that a college education is a ticket to a good job and a pathway to economic opportunity is intrinsic to the tax benefits and financial support provided by federal and state governments, to the willingness of parents and families to shoulder the burden of college’s high costs, and to the dreams of millions of students. More than 86% percent of freshmen say that “to be able to get a better job” is a “very important” reason for going to college. That is why the College Scorecard is a breakthrough—for the first time, students have access to detailed and reliable information on the economic outcomes of students after leaving college, including the vast majority of colleges that are non-selective or otherwise fall between the cracks of other information providers. The data show that at every type of post-secondary institution, the differences in post-college earnings across institutions are profound. Some students attend institutions where many students don’t finish, or that don’t lead to good jobs. Moreover, the analysis behind the Scorecard suggested not only that there are large differences across institutions in their economic outcomes, but that these differences are relevant to would-be students. For instance, the evidence in the Scorecard showed that when a low-income student goes to a school with a high completion rates and good post-college earnings, she is likely to do as well as anyone else there. While there are large differences between where rich and poor kids are likely to apply and attend, there is little difference in their outcomes after leaving school: the poorest aid recipients earn almost as much as the richest borrowers. This pattern suggests, at least, that low-income students are not mismatched or underqualified for the schools they currently attend. But it is also consistent with powerful evidence from academic studies that show that when marginal students get a shot at a higher-quality institution their graduation rates and post-college earnings converge toward those of their new peers (Zimmerman 2014, Goodman et al. 2015). Hence, the Scorecard is likely to provide useful information for students, policymakers, and administrators on important measures of post-college success, access to college by disadvantaged students, and economic mobility. Indeed, the College Scorecard shows that great economic outcomes are not exclusive to Ivy-League students. Many institutions have both good outcomes and diverse origins—institutions whose admissions policies, or lack thereof, take in disproportionate shares of poor kids and lift them up the economic ladder. Nevertheless, the design of the Scorecard required making methodological choices to produce the data on a regular basis, and making it simple and accessible required choosing among specific measures intended to be representative. Some of these choices were determined by data availability or other considerations. Some choices have been criticized (e.g. Whitehurst and Chingos 2015). Other valuable indicators could not be reliably produced on a regular basis or in a way that evolved over time as college or student outcomes changed. In part to address these issues, we supported the research that lead to the creation of Mobility Report Cards, which provide a test of the validity and robustness of the College Scorecard and an expansion of its scope. Mobility Report Cards (MRCs) attempt to answer the question “which colleges in America contribute the most to helping children climb the income ladder?” and characterize rates of intergeneration income mobility at each college in the United States. The project draws on de-identified administrative data covering over 30 million college students from 1999 to 2013, and focuses on students enrolled between the ages of 18 and 22, for whom both their parents’ income information and their own subsequent labor-market outcomes can be observed. MRCs provide new information on access to colleges of children from different family backgrounds, the likelihood that low-income students at different colleges move up in the income distribution, and trends in access over time. Background on College Scorecard The College Scorecard provides detailed information on the labor-market outcomes of financial-aid recipients post enrollment, including average employment status and measures of earnings for employed graduates; outcomes for specific groups of students, like students from lower-income families, dependent students, and for women and men; and measures of those outcomes early and later in their post-college careers. These outcome measures are specific to the students receiving federal aid, and to the institutions those students attend. And the outcome measures are constructed using technical specifications similar to those used to measure other student outcomes, like the student loan Cohort Default Rate, which allows for a consistent framework for measurement while allowing institution outcomes to evolve from cohort to cohort. The technical paper accompanying the College Scorecard spelled out the important properties and limitations of the federal data used in the Scorecard, regarding the share of students covered, the institutions covered, the construction of cohorts, the level of aggregation of statistics, and how the earnings measures were used. These choices were made subject to certain constraints on disclosure, statistical reliability, reproducibility, and operational capacity, and with specific goals of making the data regularly available (updating it on an annual basis), using measurement concepts similar to those used in other education-related areas (like student loan outcomes), and providing measures that could evolve over time as characteristics of schools and student outcomes changed. These constraints imposed tradeoffs and required choices. Moreover, the research team producing the MRCs was not bound by certain of these methodological requirements or design goals, and thus could make alternative choices. Despite making different choices, however, the analysis below shows that on balance the outcome measures common to both projects are extremely similar. In brief, the Scorecard estimates are based on data from the National Student Loan Data System (NSLDS) covering undergraduate students receiving federal aid. NSLDS data provides information on certain characteristics of students, the calendar time and student’s reported grade level when they first received aid, and detailed information on the institution they attended (such as the 6- and 8-digit Office of Postsecondary Education Identification number OPEID). These data and identifiers are regularly used as the basis for reporting institution-specific student outcomes, like the Cohort Default Rate or disbursements of federal aid. For purposes of constructing economic outcomes using these data, all undergraduate aid recipients were assigned an entry cohort—either the year they first received aid if a first-year college student, or an imputation for their entry year based on the year they were first aided and their academic level. (For instance, if a student self-reported entering their second undergraduate year in the first year they received aid, they would be assigned a cohort year for the previous year.) If a student attended more than one institution as an undergraduate, that student was included in the cohorts of each institution (i.e. their outcomes were included in the average outcomes of each institution—just as is done with the Cohort Default Rate). These data were linked to information from administrative tax and education data at specific intervals post-entry (e.g. 6, 8, and 10 years after the cohort entry year). Adjacent cohorts were combined (e.g. entry cohorts in 2000 and 2001 were linked to outcomes in 2010 and 2011, respectively). Individuals who are not currently in the labor market (defined as having zero earnings) are excluded. And institution-by-cohort specific measures like mean or median earnings and the fraction of students that earn more than $25,000 (among those working), were constructed for the cohorts (e.g. mean earnings for non-enrolled, employed aid recipients ten years after entry for the combined 2000 and 2001 cohorts). Each year, the sample was rolled forward one year, with the earlier cohort being dropped and a new cohort being added, allowing the sample to evolve over time. This focus on aid recipients is natural for producing estimates related to aid outcomes, like student debt levels or the ratio of debt to earnings. Moreover, these data are regularly used to produce institution-specific accountability measures, like the Cohort Default Rate, which are familiar to stakeholders and authorized and regularly used to report institution-specific outcomes. Constructing the sample based on entry year and rolling forward one year allowed for comparisons within schools over time, to assess improvement or the effects of other changes on student outcomes. The focus of and choices underlying the Scorecard also had several potential disadvantages, which were noted in the technical paper or by reviewers offering constructive criticism (e.g. Whitehurst and Chingos 2015). These limitations, criticisms, and omissions of the Scorecard include the following specific to the methodology and data limitations. First, the Scorecard’s sample of students includes only federal student aid recipients. While these students are an obvious focus of aid policies, and comprise a majority of students at many institutions, high-income students whose families cover full tuition are excluded from the analysis. Moreover, schools with more generous financial aid often have a smaller share of students on federal financial aid, implying that the share and type of students included in the Scorecard vary across colleges. Unfortunately, the information needed to assign students to a specific entry cohort at a specific educational institution and to report institution-specific data is not available at the same degree of reliability and uniformity for non-federal-aid recipients. For instance, Form 1098-T (used to administer tax credits for tuition paid) may not identify specific institutions or campuses (e.g. within a state university system) and does not report information on the academic level or entry year of the student. In addition, certain disclosure standards prevented the publication of institution-specific data. Estimates based on aggregated statistics (as are used in the Mobility Report Cards) include an element of (deliberate) uncertainty in the outcomes, and subjectivity in terms estimation methodology. Second, FAFSA family income may not be a reliable indicator of access or opportunity. FAFSA family income is measured differently depending on whether students are dependent or independent; it is missing for many that do not receive aid; and it can be misleading for those who are independent borrowers. Unfortunately, information on family background is generally only available for FAFSA applicants (aid recipients) who are dependents at the time of application. Mobility Report Cards provide a more comprehensive and uniform measure of family income, but only for the cohorts of students they are able to link back to their parents (e.g. those born after 1979.) Mobility Report Cards The above factors raised concerns about the Scorecard’s reliability and usefulness to stakeholders. In an effort to assess the validity and robustness of Scorecard measures using an alternative sample and with more consistent definitions of family income and more outcomes, we supported the analysis behind the study “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility in the U.S.” (Chetty, Friedman, Saez, Turner, and Yagan 2017). Perhaps most importantly, the Mobility Report Card (MRC) uses records from the Treasury Department on tuition-paying students in conjunction with Pell-grant records from the Department of Education in order to construct nearly universal attendance measures at all U.S. colleges between the ages of 18 and 22. Thus the MRC sample of students is more comprehensive of this population relative to the Scorecard. However, older students are generally not included in the MRC sample and certain institutions cannot be separately identified in the MRC sample. Furthermore, the MRC methodology relies on producing estimates of institutional outcomes rather than producing actual data on institution outcomes. At certain institutions, particularly those that enroll a disproportionate share of older students (such as for-profit and community colleges) and where a large share students receive Title IV aid, the Scorecard provides a more comprehensive sample of student outcomes. Another area of difference is that the MRC organizes its analysis around entire birth cohorts who can be linked to parents in their adolescence. It then measures whether and where each member of the birth cohort attends college. By following full birth cohorts, cross-college comparisons of adult earnings in the MRC measure earnings at the same age (32-34), unlike the Scorecard which measures adult earnings across colleges at different points in the lifecycle, depending on when the students attended the college. The advantage of the MRC approach is that it allows a comprehensive analysis of the outcomes of the entire birth cohort at regular intervals. However, the disadvantage mentioned above is that there is no information on older cohorts born prior to 1980. In addition, the MRC includes zero-earners in its earnings measures, whereas the Scorecard excludes them from their measures of earnings outcomes. Because it is not possible to differentiate individuals who are involuntarily unemployed (e.g. who were laid off from a job) from those who are out of the labor force by choice (in school, raising children, or retired), the Scorecard focused on measuring earnings specifically for those who clearly were participating in the labor market. Finally, family income in the MRC is measured consistently across cohorts using a detailed and relatively comprehensive measure of household income: total pre-tax income at the household level averaged between the kid ages of 15 and 19, as reflected on the parents’ tax forms. The design choices made in developing the MRC come at the cost of published statistics not being exact and instead being granular estimates (see Chetty Friedman Saez Turner Yagan 2016) and of not being as easily replicable over time. However, the MRC’s design addresses many of the critiques made of the Scorecard. If the critiques of the Scorecard are quantitatively important, one should find that the MRC and Scorecard values differ substantially. In other words, the MRC data provide an estimate of how much the data constraints and methodological choices affect the data quality. Comparison of the College Scorecard and Mobility Report Cards The most basic test of the robustness of the Scorecard to the variations embodied in the MRC is to compare the main Scorecard adult earnings measure—median earnings of students ten years after they attend a college—with the analogous measure from the MRC: median earnings in 2014 (age 32-34) of the 1980-1982 birth cohort by college. For shorthand, we refer to these measures as Scorecard median earnings and MRC median earnings, respectively. Figure 1 plots MRC median earnings versus Scorecard median earnings. Both median earnings measures are plotted in thousands of 2015 dollars. Overlaid on the dots is the regression line on the underlying college-level data. Figure 1 The graph shows an extremely tight, nearly-one-for-one relationship: a slope of 1.12 with an R2 of 0.92. Visually one can see that not only does each extra thousand dollars of Scorecard median earnings typically translate into an extra thousand dollars of MRC median earnings, but the levels line up very closely as well. Hence across the vast majority of colleges, Scorecard median earnings are very close to MRC median earnings. The close correspondence between MRC median earnings and Scorecard median earnings can also be seen when examining college-level comparison lists. For example, among colleges with at least 500 students, almost exactly the same colleges appear in the top rankings using either measure. (This is natural given the very high R2 reported in Figure 1.) Hence, the Scorecard and MRC share a very tight relationship. In unreported analysis, we find that two offsetting effects tend to explain this very tight relationship between Scorecard median earnings and MRC median earnings. On the one hand, the MRC’s inclusion of students who earn nothing as adults somewhat reduces each college’s median adult earnings. On the other hand, the MRC’s inclusion of students from high-income families somewhat increases each college’s median adult earnings, as students from high-income families are somewhat more likely to earn high incomes as adults. The two competing effects tend to offset each other in practice, yielding MRC median earnings that are quite close to Scorecard median earnings. While some schools are outliers, in the sense that the measures differ, those examples are often readily explained by differences in methodological choices. For instances, because the Scorecard conditions on having positive earnings, schools where an unusually high share of students voluntarily leave the labor force have different outcomes in the MRC than the Scorecard. The other important contributor to outliers is the MRC’s restriction to students enrolled between ages 18 and 22, which tends to exclude many older, mid-career workers. These individuals tend both to be employed, often have relatively high earnings, and tend to enroll at for-profit schools (or other schools aimed at providing mid-career credentials). The Scorecard includes these students, whereas the MRC tends to exclude them. Conclusion The College Scorecard was created to provide students, families, educators, and policymakers with new information on the outcomes of students attending each college in the United States, and improving the return on federal tax and expenditure programs. Mobility Report Cards expand the scope of the information on the outcomes and the characteristics of students attending American colleges. Our analysis finds a very high degree of agreement at the college level between Scorecard median adult earnings and Mobility Report Card median adult earnings, suggesting that the Scorecard is a reliable tool measuring the outcomes of students and institutions that benefit from federal student aid and tax expenditures. References Chetty, Raj, John N. Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan. “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility in the U.S.”. (2016). Goodman, Joshua, Michael Hurwitz, and Jonathan Smith. “Access to Four-Year Public Colleges and Degree Completion.” Journal of Labor Economics (2017). Whitehurst, Grover J. and Matthew M. Chingos. “Deconstructing and Reconstructing the College Scorecard.” Brookings Working Paper (2015). Zimmerman, Seth D. "The returns to college admission for academically marginal students." Journal of Labor Economics 32.4 (2014): 711-754. Adam Looney, Deputy Assistant Secretary for Tax Analysis at the US Department of Treasury.  https://www.washingtonpost.com/news/rampage/wp/2015/02/17/why-do-americans-go-to-college-first-and-foremost-they-want-better-jobs  This assignment was capped at two years, so that students reported entering their third, fourth, or fifth year were assigned a cohort two years prior.  For instance, in the 2002 Scorecard entry cohort, 42 percent of students were over age 22 when they first received aid.  The Scorecard data base does include the fraction of borrowers without earnings, which allows for the computation of unconditional mean earnings.  We also restrict to colleges with at least 100 MRC students on average across the 1980-1982 birth cohorts and to colleges that have observations in both the Scorecard and the MRC. For MRC colleges that are groups of Scorecard colleges, we use the count-weighted mean of Scorecard mean earnings across colleges within a group. See Chetty Friedman Saez Turner Yagan (2016) for grouping details.
Issue Brief Four: The Distribution and Evolution of the Social Safety Net and Social Insurance Benefits from 1990 to 2014 Today, the Office of Economic Policy at the Treasury Department released the fourth in a series of briefs exploring the economic security of American households. This brief focuses on the distribution of benefits from the social safety net and social insurance programs and how that distribution has changed since 1990. The social safety net is largely defined as those programs that help protect individuals and households from negative economic shocks. As a result, eligibility for the social safety net programs is generally restricted to those whose incomes fall below certain threshold amounts and whose assets do not exceed certain amounts. While there are many programs that aim to protect individuals against negative economic shocks, in this brief, we focus on the following programs: Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), and the Earned Income Tax Credit (EITC). Social insurance provides individuals with protection against economic risks, with benefits linked to certain triggers. Social insurance is provided to all individuals regardless of their income or wealth, although the benefit amounts may be tied to past work experience, income, or wealth. Social Security (retirement, survivor, and disability), Medicare, and Unemployment Insurance are the most well-known social insurance programs. Over the past 25 years, there have been significant changes in the provision and distribution of benefits from safety net and social insurance programs. Some of these changes have been designed to reduce the work disincentives inherent in many programs, while other changes have expanded eligibility for benefits to individuals above the very bottom end of the income distribution. The past 25 years have also seen important changes in demographics and labor force participation patterns. Together, these changes have important implications for which individuals and households are eligible to receive benefits, the distribution of benefits by income, how much in benefits households receive, and the labor force participation of eligible individuals. During the period from 1990 to 2014, among non-elderly households, the poorest households, households with children under the age of 18, and households with a disabled individual received the largest average benefits from the social safety net and social insurance programs. Elderly households and households with a disabled individual have experienced relatively little change in the distribution of benefits since 1990, but non-elderly non-disabled households with children under the age of 18 have experienced large changes in the distribution of benefits. These changes reflect the fact that the receipt of benefits for these households has become increasingly tied to their ability to find employment. As a result, non-disabled households with children just above the very bottom of the income distribution – in the second, third, and fourth deciles – have seen the largest growth in the average total benefits (see the figure below). While tying the receipt of benefits to employment reduces the disincentive effects of these programs on willingness to work, it may also reduce the ability of the safety net to respond to adverse macroeconomic conditions. In particular, during periods of elevated unemployment, the safety net may be less effective in preventing individuals and households from falling into poverty. This limitation should be considered when designing the discretionary policy response to future macroeconomic shocks. While the social safety net and social insurance programs have historically provided benefits to households with children and disabled households, non-elderly non-disabled households without children under age 18 have traditionally received few benefits. This continues to be true such that, across the income distribution, non-disabled households without children receive far less from the social safety net and social insurance programs than any other group (see the figure below). As a result, in the event of a negative income shock, there exists only a limited social safety net to prevent these households from falling into poverty. One reason that non-disabled households without children are less likely to receive benefits as income increases is that fewer of the social safety net and social insurance programs are available to households in this group. For example, the EITC provides material benefits to households with children in the bottom third of the income distribution, while the EITC provides very little benefit to non-disabled households without children. Moreover, non-disabled households without children have less access to cash welfare and SNAP. Overall, though, the social safety and social insurance programs provide critical support to vulnerable American households. Moreover, according to the most comprehensive measures of poverty currently available, poverty in the United States would be significantly higher in the absence of these programs. In addition, these programs have contributed to a material reduction in the incidence of poverty since the late 1960s, when many of the social safety net programs were created. Karen Dynan is the Assistant Secretary of Economic Policy at the Department of the Treasury.
January 17, 2017 The Honorable Mitch McConnell Majority Leader United States Senate Washington, DC 20510 Dear Mr. Leader: As the 115th Congress begins, we write to underscore the need for additional legislation early in this session to address the economic and fiscal crisis in Puerto Rico. The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) provided Puerto Rico with important fiscal oversight and debt restructuring tools, and now the Oversight Board and Puerto Rico’s new Governor must take the critical next steps required by this federal legislation. Working with the new Governor, the Oversight Board now must certify a Fiscal Plan and set a path to comprehensively restructure the debt before the expiration of PROMESA’s automatic stay. Treasury has continued to provide both the Oversight Board and the new Governor with technical assistance as requested, and will remain able to do so after the transition to the next Administration. Despite the important progress achieved to date with bipartisan support, the work is not done. As Puerto Rico moves forward on these next steps, Congress must enact measures recommended by both Republicans and Democrats that fix Puerto Rico’s inequitable health care financing structure and promote sustained economic growth. Without congressional action to address these issues, Puerto Rico’s return to growth and opportunity will be a significant challenge. Most urgently, Congress should address Puerto Rico’s “Medicaid cliff” funding issue before April as recommended last month by the Congressional Task Force on Economic Growth in Puerto Rico. Failure to do so would jeopardize health care for up to 900,000 poor U.S. citizens living in Puerto Rico. CONGRESSIONAL TASK FORCE REPORT On December 20, the Congressional Task Force on Economic Growth in Puerto Rico, established by PROMESA, released its Final Report. The bipartisan report provides an overview of the economic challenges facing Puerto Rico and a series of potential solutions that, if crafted well and enacted quickly, are necessary for a sustainable economic recovery. It is important that Congress not only turn ideas into action, but in doing so, address Puerto Rico’s significant remaining economic and social challenges in meaningful ways to help put Puerto Rico on a path of sustained economic growth. As the report acknowledges, Puerto Rico faces an imminent shortfall in health care funding that could leave up to 900,000 Americans without coverage if Congress does not act in the near future. Puerto Rico’s already vulnerable health care system is stretched further by a Zika outbreak that, as of January 4, has resulted in over 34,000 cases, and will affect numerous women, children, and families for years to come. It is time to provide a long-term solution to Puerto Rico’s historically inadequate federal Medicaid financing, which threatens the viability of Puerto Rico’s Medicaid program and worsens Puerto Rico’s fiscal crisis. If Congress fails to craft a long-term solution, immediate action is still needed to ensure full fiscal year 2018 financing to avoid the “Medicaid cliff” identified in the report. Without action before April, Puerto Rico’s ability to execute contracts for Fiscal Year 2018 with its managed care organizations will be threatened, thereby putting at risk beginning July 1, 2017 the health care of up to 900,000 poor U.S. citizens living in Puerto Rico. Additionally, Puerto Rico continues to suffer from double digit unemployment and a labor force participation rate that is only two-thirds that of the U.S. average. A federally-financed, locally-administered Earned Income Tax Credit (EITC) in Puerto Rico would create incentives for work and increase participation in the formal economy – just as it has done for decades in the 50 states and the District of Columbia. Instead of recommending the immediate enactment of an EITC, the Task Force only suggested Congress further explore the proposal. We strongly encourage Congress to enact this powerful economic driver to bolster Puerto Rico’s future. Our analysis of the situation over the last several years demonstrates that an EITC would be the most effective and powerful tool to address these structural challenges to economic growth. Beyond those two major issues, the Task Force recommended a number of other policies that we agree should be enacted. First, we appreciate the bipartisan recommendation for Congress to continue authorizing Treasury to provide technical assistance to Puerto Rico. Furthermore, while we recommend a different approach to expand the Child Tax Credit to more Puerto Rican families, one that is locally administered, we welcome the Task Force recommendation for Congress to expand the Child Tax Credit in Puerto Rico, to the extent it is well-designed and supplements an EITC program for Puerto Rico. We support the Task Force’s acknowledgment of the importance of data in benchmarking economic growth and fiscal developments in Puerto Rico and the recommendations to improve data quality and timeliness. Finally, we are pleased with the recommendations on small business incentives, and the need to include Puerto Rico in funding and training programs that address Puerto Rico’s differential treatment in some Federal programs. It is time for Congress to move quickly to put these recommendations into law. Last summer, Republicans and Democrats in Congress took decisive action in PROMESA to help improve Puerto Rico’s fiscal position by establishing an independent oversight board and providing it with comprehensive debt restructuring tools. As you know, these tools were provided to Puerto Rico as an alternative to a federal bailout and provide Puerto Rico’s government and the Oversight Board with comprehensive authorities to address the debt crisis. Members of Congress now must work together quickly to enact well-crafted legislation to encourage growth and opportunity for our fellow citizens in Puerto Rico. The Treasury Department and the Department of Health and Human Services stand committed to working with you to achieving those goals throughout the remainder of the transition to the next Administration. Sincerely, Jacob J. Lew Sylvia M. Burwell Secretary Secretary Department of the Treasury Department of Health and Human Services Identical letter sent to: The Honorable Charles E. Schumer The Honorable Paul D. Ryan The Honorable Nancy Pelosi
Today, Treasury released the 2016 US Financial Report, which can be found here: https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/fr_index.htm Please see the Secretary's letter below: January 12, 2017 A Message from the Secretary The annual Financial Report of the U.S. Government provides to the public a comprehensive overview of the Government’s current financial position, as well as critical insight into our long term fiscal outlook. The Fiscal Year 2016 Financial Report, the final U.S. Financial Report of the Obama Administration, reflects an economy that has come a long way since 2008, with sustained private sector job growth and increasing vitality. Under President Obama’s leadership, there has been substantial economic and fiscal progress, showing what is possible when strategic investment is paired with smart reforms. Labor market conditions continue to improve, we have added millions of jobs to the economy and GDP has grown steadily. Globally, the United States remains a driver of steady economic growth. In Fiscal Year 2016, the Nation’s economic gains contributed to increased revenues and sustainable deficit financing for the next decade. The Government’s estimated long-term fiscal gap continues to be reduced by the provisions of the Affordable Care Act of 2010, Budget Control Act of 2011, and the American Taxpayer Relief Act of 2013. These and other measures support our economy, allow our government to operate more efficiently, and support long term fiscal health. This Administration’s policies have created the space to address our country’s long term fiscal challenges; however, near term policies that reduce revenues or increase spending, such as through changes to our tax code or the Affordable Care Act, could increase the size of the fiscal gap and force more dramatic adjustments in later years. We must ensure that our prosperity is shared by all Americans, not just those at the top. I am proud of the work we have done as a country over the past eight years to address our economic challenges and am pleased to share this strong report. Jacob J. Lew Margaret Mulkerrin is the Press Assistant at the U.S. Department of Treasury.
Earlier today, I was honored to join Treasury Secretary Jacob Lew and Deputy Secretary Sarah Bloom Raskin to unveil designs for the 2017 American Liberty Gold Coin. The unveiling not only marked a historic milestone for the allegorical Lady Liberty, who has been featured on American coinage since the late 1790s, but also served to kick-off the Mint’s 225th anniversary—a year-long public awareness campaign about its mission, facilities and employees. I am very proud of the fact that the United States Mint is rooted in the Constitution. Our founding fathers realized the critical need for our fledgling nation to have a respected monetary system, and over the last 225 years, the Mint has never failed in its mission to enable America’s growth and stability by protecting assets entrusted to us and manufacturing coins and medals to facilitate national commerce. We have chosen “Remembering our Past, Embracing the Future” as the Mint’s theme for our 225th Anniversary year. This beautiful coin truly embodies that theme. The coin demonstrates our roots in the past through such traditional elements as the inscriptions United States of America, Liberty, E Pluribus Unum and In God We Trust. We boldly look to the future by casting Liberty in a new light, as an African-American woman wearing a crown of stars, looking forward to ever brighter chapters in our Nation’s history book. The 2017 American Liberty Gold Coin is the first in a series of 24-karat gold coins the United States Mint will issue biennially. These coins will feature designs that depict an allegorical Liberty in a variety of contemporary forms including designs representing Asian-Americans, Hispanic-Americans, and Indian-Americans among others to reflect the cultural and ethnic diversity of the United States. 2017 American Liberty Gold Coin obverse (left) and reverse (right). (United States Mint Photos) Rhett Jeppson is the Principal Deputy Director of the U.S. Mint.
Independent Workers Are Almost Three Times More Likely To Rely on Marketplace Coverage than Other Workers Today, Treasury released a report with new data on sources of health insurance coverage for small business owners and self-employed workers. These data show that the Affordable Care Act (ACA’s) Health Insurance Marketplaces are playing an especially crucial role in providing health coverage to entrepreneurs and other independent workers. Prior to the Affordable Care Act, workers without employer-sponsored health insurance often lacked options for affordable coverage. Not only did high uninsured rates impede access to care and worsen financial security, but the risk of ending up without health insurance coverage prevented some individuals from striking out on their own. Experts considered “job lock,” or individuals’ need to stay in an employment situation to maintain health coverage, a significant impediment to entrepreneurship. To help address these challenges, the ACA’s Marketplaces were designed to offer portable health insurance coverage to small business owners and other independent workers, a growing segment of the economy. One in five 2014 Marketplace consumers was a small business owner or self-employed New data included in today’s Treasury Department report on alternative work arrangements show that small business owners and self-employed workers are taking advantage of the opportunity to purchase health coverage through the Marketplaces. In 2014, 1.4 million Marketplace consumers were self-employed, small business owners, or both, indicating that about one in five 2014 Marketplace consumers was a small business owner or self-employed. Indeed, among the 5.3 million workers who purchased Marketplace coverage for themselves (excluding their children or non-working spouses), about 28 percent were workers whose income was not primarily earned from wages paid by an employer. In fact, small business owners and self-employed individuals were nearly three times as likely to purchase Marketplace coverage as other workers. Nearly 10 percent of small business owners and more than 10 percent of gig economy workers got coverage through the Marketplace in 2014. Among small business owners and other independent workers, those with annual incomes below $65,000 were the most likely to rely on the Marketplace for health insurance. Middle- and lower-income Americans who buy coverage through the Marketplace are eligible for tax credits to help keep coverage affordable. About 65 percent of small business owners and 69 percent of all self-employed or independent workers have incomes below $65,000. Between 2014 and 2015, the number of people who signed up for Marketplace coverage increased by around 50 percent. And enrollment increased further in 2016, and is poised to rise again in 2017. Marketplace coverage among independent workers has almost certainly risen as well. HHS is also partnering with outside companies that support freelance workers, entrepreneurs, and start-ups to reach more independent workers with information about Marketplace coverage and financial assistance. Geographic patterns in small business owners’ and independent workers’ health coverage Today’s report includes detailed state-by-state data on Marketplace participation among entrepreneurs and independent workers. In all 50 states and D.C., thousands of small business owners and independent workers bought Marketplace coverage in 2014. Of note: · The ten states with the highest share of small business owners relying on the Marketplace for coverage were Vermont, Idaho, Florida, Montana, Maine, California, New Hampshire, Washington, D.C., Rhode Island, and North Carolina. · The 10 states with the largest number of small business owners with Marketplace coverage were California, Florida, Texas, New York, Georgia, North Carolina, Pennsylvania, Michigan, Washington, and Virginia. Adam Looney is the Deputy Assistant Secretary for Tax Analysis at the U.S. Department of Treasury. Kathryn Martin is the Acting Assistant Secretary for Planning and Evaluation at the U.S Department of Health and Human Services.  The Treasury report defines small business owners as Schedule C filers whose business activities (measured by expenses and gross receipts) exceed certain de minimis thresholds (a minimum of $5,000 of business expenses and either $15,000 of gross receipts or $10,000 of business expenses). Self-employed workers are defined as individuals who earn at least 85 percent of their earnings from operating a sole-proprietorship. “Gig economy workers” are those whose self-employment income derives in part or in whole from activities conducted through an online platform.
Today, the Office of Economic Policy at the Treasury Department released the fourth in a series of briefs exploring the economic security of American households. This brief focuses on the economic security of older women. In this brief, we ask: Are older women at greater risk of poverty or being unable to manage their expenses than other populations? Are there specific groups of women at risk? What are the implications for policy? Compared with men, we find that elderly women are much more likely to be economically insecure. We attribute this finding to a variety of factors. Women live longer than men, meaning they have to finance a longer retirement and that they are more likely to reach an age in which they must finance disability costs. In addition, women tend to have lower lifetime earnings than men. Finally, women are more likely than men to live alone and thus are less likely to live with someone with whom to share economic risks. In this brief, we assess economic insecurity in a number of ways but focus on two measures: the poverty rate and the “overextended” rate—the share of the population whose spending exceeds what it can afford based on its income and annuitized wealth. We view this latter measure as reflecting economic insecurity, because elderly women who are overextended and on fixed incomes must reduce spending to live within their means. For women with low levels of consumption, this could entail cutting back on necessities like food and medicine. Comparing different measures of economic security, we find that the overextended share of the female population is 29 percent, far higher than the poverty rate of 12 percent. The implication is that economic insecurity is broader than the poverty rate implies. We find that single women are far more economically insecure on all measures than married women and that widowhood dramatically increases the likelihood of becoming insecure relative to remaining married. Widowhood is associated with a large loss in income and wealth; and while widows experience a large drop in household spending at widowhood, they continue to cut spending at rates faster than single women and married households. We also find that disability is associated with economic insecurity. The median disabled woman’s household assets (including non-liquid assets like housing) are sufficient only to finance six months in a nursing home, and the median disabled woman’s household has financial wealth sufficient to cover less than half a month of nursing home expenses. Women who remain married throughout their elderly years, on the other hand, do not experience high rates of economic insecurity. And holding constant marital status and disability status, we do not observe sharp increases in economic insecurity as women age. Notably, even though the poverty rate rises for women as they age, the overextended rate falls as women rely more on wealth to support themselves. All told, our findings suggest that public policy should focus on specific risks associated with aging, particularly living alone and living with a disability. We note that married couples might benefit from shifting more of their wealth from periods in which both spouses are alive to periods in which only one spouse is alive. Such an outcome could be accomplished in the private sector with greater use of financial products with survivor benefits. Experts have also suggested ways that public policy could help address the challenge, such as by restructuring Social Security to increase survivor benefits. Looking at disability, we note that while Medicaid and private long-term care insurance provide protection for some households, there is still a large unmet need that is apparent when looking at the economic security risks posed by disability. Karen Dynan is the Assistant Secretary of Economic Policy at the Department of the Treasury.
For more than 200 years, Treasury has been managing the resources of the Federal government and embracing advancements and cutting-edge practices. Today we have an opportunity to create a more data-driven government that empowers our leaders to make more strategic decisions and provide the public with greater access and insight on how taxpayer money is spent. The ongoing Digital Accountability and Transparency Act (DATA Act) implementation, in which Treasury is playing a leading role, is providing that opportunity as agencies work to meet new standards that could enable the use of data and analytics. In 1990, the Chief Financial Officers Act of 1990 (CFO Act) established a vision for federal financial management to “provide for the production of complete, reliable, timely, and consistent financial information for use by the executive branch of the Government and the Congress in the financing, management, and evaluation of Federal programs.” Significant achievements have been made to maintain and report high-quality financial data — but the full vision of the CFO Act is still a work in progress. The 24 CFO Act agencies have been successful at promoting new accounting and reporting standards, generating auditable financial statements, strengthening internal controls, improving financial management systems and enhancing performance information. However, there is room for growth in the way financial reporting adapts to the evolving information technology landscape. Through the DATA Act implementation process Treasury has developed a DATA Act Information Model Schema (DAIMS) that links the financial data produced by agency CFOs with other spending data on Federal awards — including grants, loans and procurement data (as well as other related attributes). This new data set includes more than 400 data elements and significantly expands the data available to agency CFOs and other agency leadership. The DAIMS can also be extended to link to other administrative and program data to support data-driven decision-making. A New Vision for Federal Financial Management Treasury’s vision for a 21st century Federal Finance Organization includes five key levels based on leading private sector benchmarks for finance organizations. The first level covers the basics for any finance organization — budget formulation and transaction processing. The second level includes fundamental financial policies and regulatory controls to ensure appropriate accountability. Most agencies have achieved levels one and two. Levels three and above are where agencies can begin to see the added value in the investment of high-quality data and internal controls. This data can now be managed and used to support decision-making and to improve operations and outcomes. In addition to leading the government-wide implementation of the DATA Act, Treasury is also required to implement the law as an individual agency. As an implementing agency, Treasury is taking a data management and service delivery perspective, satisfying both internal and external customers who are demanding dynamic visualizations of data, meaningful reports and management dashboards. The DATA Act provides a unique opportunity to provide authoritative and standardized data across the enterprise to meet various needs, which fits into the new vision for Federal Financial Management above. At Treasury, we are expanding our data analytics and reporting efforts to gain more value from our data. The Department has been working internally to link existing enterprise data management activities to a financial data governance program working across the C suite and internal organizations. Treasury is also envisioning a new financial data service portal that will serve as the central repository for all Treasury financial data where agency leadership will have access to data, tools and resources to conduct program research and visualize the data in new ways, starting with DATA Act related insights. This data infrastructure will allow us to provide greater transparency and also create a more modern 21st century Federal Finance Organization that is a better steward of public resources. We believe that better data leads to better decisions and ultimately a better government. Christina Ho is the Deputy Assistant Secretary for Accounting Policy and Financial Transparency and Dorrice Roth is the Deputy Chief Financial Officer at the Department of the Treasury.