Catholic schools are closing their doors all across America, leaving future generations with nowhere to turn for the high-quality academics and values-based education so many families are seeking. The number of students attending Catholic schools in the US fell from about 5.2 million in 1965 to around two million in 2008.
Pioneer Institute believes these schools are worth preserving. For over a decade, we have raised our voice in support of these excellent academic options, and tools such as tax credit scholarships that would enable more families to attend.
Pioneer has held public forums, published research on the benefits of Catholic education, on successful models such as Cristo Rey, and on policy changes that would stop the Massachusetts education department from depriving religious school students of special needs services and school nurses. The Institute has also convened key stakeholders, appeared in local and national press, filed amicus briefs, produced a feature a documentary film, and much more.
This week on JobMakers, host Denzil Mohammed talks with Jeff Farrah, General Counsel at the National Venture Capital Association, a D.C.-based group that advocates for public policy supportive of American entrepreneurship. They discuss why we should adopt reforms such as a “start-up visa,” allowing immigrant entrepreneurs to stay here in America so we can benefit from the potential job creation, innovation, and economic dynamism of newcomers who graduated from our universities, worked for American companies, or simply have a viable plan to start a business. Jeff knows that immigration and entrepreneurship go hand-in-hand, that immigrants are twice as likely to start a business, and that it’s not just big policy changes that could move the needle, as you’ll learn in this week’s JobMakers.
Guest:
Jeff Farrah serves as General Counsel at NVCA, where he advocates before Congress, the White House, and agencies for pro-entrepreneurship policies and leads in-house legal matters for the association, including management of the NVCA Model Legal Documents. He loves working at the intersection of venture, public policy, and the law. Jeff concurrently serves as Treasurer of VenturePAC, the political action committee of NVCA. Prior to joining NVCA, Jeff was Counsel to the U.S. Senate Committee on Commerce, Science, and Transportation where he advised Chairman John Thune (now Senate Majority Whip) and members of the committee on technology, telecommunications, and Internet policy. His committee perch gave him an invaluable perspective on how policymakers think about technology and its impact on American life. Previously, Jeff served as General Counsel to U.S. Senator Scott Brown, serving as Brown’s top legal and policy advisor on a variety of issues. During the 2012 presidential election, Jeff was a member of Governor Romney’s Trade Policy Advisory Committee. Prior to the Senate, Jeff was an attorney at a leading Washington, DC law firm for international trade matters. His trade law experience includes World Trade Organization Dispute Settlement and trade remedies cases before U.S. agencies. A native of southern California, Jeff earned his Bachelor of Arts degree in Political Science from the University of California, Santa Barbara (Go Gauchos!) and his Juris Doctor from Seattle University School of Law. Jeff was a Visiting Student at Georgetown University Law Center.
Read a Transcript of This Episode
Please excuse typos.
Denzil Mohammed:
I’m Denzil Mohammed. And this is Jobmakers
Denzil Mohammed:
As we’ve established in this podcast, immigration and entrepreneurship go hand in hand, immigrants are twice as likely to start a business. So why then don’t we have a visa allowing immigrant entrepreneurs to stay here? For Jeff Farrah, general counsel at the National Venture Capital Association, a DC-based group that advocates for public policy that supports American entrepreneurship, a so-called start-up visa is a no-brainer for immigrants who went through our universities or worked for American companies, or simply have a viable business plan and want to start a business here. We should be rolling out the red carpet. Instead we reject them and actively deny ourselves job creation, innovation and economic dynamism. Jeff is advocating for a startup visa and other immigration reforms that would bring jobs to America. And he notes that it’s not just big policy changes that could move the needle. As you’ll learn in this week’s Jobmakers. Jeff Farrah, thank you for joining us on Jobmakers. How are you?
Jeff Farrah:
I’m doing well. Denzil. Thanks so much for having me. So
Denzil Mohammed:
Why is immigration such an important issue to the National Venture Capital Association? I see it’s one of your 10 issue areas. Where does it rank and why?
Jeff Farrah:
Well, you know, I kind of think back to a conversation I had with a board member of ours several years ago. And we were walking in, in DC, between meetings at an agency and on the way to Capitol Hill. And we were talking about a lot of the issues on NVCA’s list. And, you know, we said so many, the things you all do were so to us and important to the founders. But when you think about immigration, you’re really talking about the whole company because without these individuals coming to the United States, oftentimes to launch a high-growth startup, that there’s no company in the first place. And so it’s kind of a Genesis moment in some ways. And so I think that, you know, all you have to do is look at the storied history of immigrant entrepreneurs who have launched so many iconic US companies. And it becomes obvious why it is that we really need to make some serious changes in this country, if we’re going to remain the best place in the world to launch a high-growth company.
Denzil Mohammed:
So has it always been a focus of your association or have there been times where it’s taken precedent over others?
Jeff Farrah:
Well, certainly a lot of times with any trade association, we’re a little bit at the whims of what it is that Congress and federal policy makers are doing. And so certainly there are times when immigration is something that is a lot more on the list. And, you know, I’m reminded of course, of the time period during the Obama administration, where there were efforts to pass comprehensive immigration reform reform also happened during the Bush administration, of course, during the 2013 bill that I’m referring to, there was a start up visa that was included in that that NVCA had a lot to do with pushing. It’s certainly been a piece of NVCA’s advocacy work for many decades. And, and this is something where going back about 15 or 20 years, it was a group of venture capitalists that, that really recognized first that we didn’t have a tailor made way to be able to have foreign born entrepreneurs come into the country, that we were very much using these square peg round hole solutions, and that we needed to have a, a more elegant way to allow these individuals who want nothing more than to launch new American enterprises to be able to come to our country.
Jeff Farrah:
And so really ever since then, a startup visa has been something that has been at the forefront. And we’re of course, very interested in, in getting this across the finish line, but I’ve had a number of successes along the way.
Denzil Mohammed:
So this startup visa, you make it sound as though it’s almost inherently American this idea of enterprise and starting a business and creating opportunity. So I see several countries have some for some form of a startup visa. I mean, from Australia and Canada, all the way to Estonia and Lithuania the Netherlands, Singapore, Denmark where is the US on this issue?
Jeff Farrah:
Unfortunately we’re not by far enough along. And I, I think, you know the countries that you’ve mentioned, you know, both in immigration, but in other policy areas too, they they’ve seen all the benefits that, that high growth startups have created in the United States. And our playbook is, is obvious in terms of the things that we have done in this country to create that secret sauce. And so other countries are trying to replicate a lot of the policies that, that we have had historically in this country, but in, in one way, they’ve, they’ve innovated and, and kind of done things that we’ve not been able to do, which is in trying to attract the world’s best entrepreneur entrepreneurs to their shores. And so, despite the fact that we’ve seen this proliferation of other countries creating startup visas, we, we have not in the United States and it’s not cuz it’s a terribly controversial idea.
Jeff Farrah:
In fact, you know, in my time talking with a lot of lawmakers, you don’t really get any pushback on the substantive issue. If you ask people, should we make it easier for individuals who want to create new American companies and give American citizens jobs? Should we allow those people to do some easily? You will probably get 535 members of the house and the Senate to nod an approval. The tricky part though, is that immigration policy tends to be caught up in some other very, very controversial issues. And we’ve been in a, a bit of a dynamic here in the last several years where not much else can move on immigration reform unless the entire package moves. And so the politics tend to be very complicated and it does lead to this unfortunate situation where perhaps some of the low hanging fruit like a startup visa are, are not able to get across line.
Jeff Farrah:
And we’ve certainly tried to come up with, with perhaps creative ways of addressing that, but ultimately have not been able to, to get the, the bill passed. We have been very, very fortunate to have champions on this issue on a bipartisan basis, going back many years, the most recent version of this that viewers should should tell a look at is called the like act from Congresswoman Zoe Larine its the let immigrants kickstart employment act. And this is Ms. LG Green’s latest version of, of a bill. She had done previously to create a start at visa and she both creates a non-immigrant visa and then an immigrant visa that individuals can into. So if you first come on the non-immigrant visa or you come on an oh one, a visa, you can graduate into the immigrant visa on a pathway to citizenship. And then over in the Senate side, there is a, a larger bill called the startup act, which does a number of, of things in startup policy. And that’s from a group of Senator Mark Warner from Virginia, Jerry Moran from Kansas, Amy Klobuchar, Roy Blunt, really a great group of senators. And within that bill, there is also a startup visa. So that really shows that there is the capability of this really getting the attention of people from all different political stripes.
Denzil Mohammed:
I understand this idea of, of it being mired within something that’s so politicized and so contentious immigration. Whereas it’s, it’s such an integral part of who, of what America is. And I, I know of many stories of entrepreneurs or voting entrepreneurs who because of our immigration and were not allowed to stay here and start their companies an educational online resource called Sutori started by a group of three immigrants. It ended up being, you know, two of them had to go to other countries in order to, to continue the business. Only one was, was allowed to stay here. And you, you spoke earlier about, you know, it being such a part of our, of America, America’s secret sauce. So many iconic American brands, Levi’s jeans, Kraft, Coors bear, Budweiser up until Tesla and Google and eBay all founded by immigrants. Explain to me how the startup visa would work and you know, other initiatives that, that you’ll support like us, you know, the idea of stapling, a green card onto college diploma. Mm-Hmm
Jeff Farrah:
Sure, you know, I, I think that a great illustration of how the startup visa works is, is mentioning perhaps a, another famous foreign born entrepreneur. There’s a gentleman named Jyoti Bansal and Jyoti is from India, originally. He came to the United States on an H 1 B visa and he wanted to be an entrepreneur, but he was working under his H1B status. That was the, the authorization that he had to be in the country. And Jyoti has talked publicly about the fact he needed to wait seven years in order to get his green card. Well, of course he couldn’t launch his own company while he was working on an H1B visa. So he needed to have the green card to be able to go and, do that. And so you kind of think about somebody like him, who is unnecessarily waiting to do what they’re probably put on this earth to do, which is to launch a, a high growth company.
Jeff Farrah:
Well, Jyoti finally gets the green card. He launches a company called app dynamics and AppDynamics on the eve of its IPO ended up selling to Cisco for $3.7 billion. And you think about that situation. Well, obviously Jyoti has done a tremendous job of creating value. He’s got lots and lots of employees, a leading American technology company values it at almost $4 billion. And you think to yourself, well, it’s really a shame that we had to wait that additional seven years for that individual to go off on their entrepreneurial journey. And then the other issue that Jyoti has talked about is that he had friends of his during the same time period, that didn’t feel like they could wait all the time that was needed. And so they ended up leaving the country and going and launching new companies in other countries.
Jeff Farrah:
And that is unbelievably frustrating because the United States could have had those companies. We could have had that additional dynamism in the economy. We could have had that employment. We could have had that innovation, the intellectual property, so on and so forth. And I think that, you know, one thing that we’ve spent a lot of time talking with policymakers about is there’s this, there’s this recognition. I think in, in a lot of circles here that the venture has really become globalized in, in many ways, because as I said before, so many countries have copied our playbook and this is a perfectly reasonable thing for them to do, to try and create startup ecosystems in, in their own countries. If you look out over the last 20 years or so ago, the United States used to get about 86% of the global venture capital pie that would go into us startups that number’s been dropping over the course of the last couple decades.
Jeff Farrah:
And the last couple of years, we got about 51% of global of venture capital. Now the total number of course continues to go up. We continue to raise more venture capital here in the United States, which is a good thing, but it also shows that other countries are getting their act together. And they are able to welcome these individuals who are unfortunately not welcomed in the United States with, with something like a startup visa. And so that’s something we’re really trying to fix here because I think that ultimately the visa categories that we have now at our disposal, they’re not made for the entrepreneurial model. You think about an individual who goes to work at a large tech company on an H one B visa. That’s a, a different circumstance as somebody who wants to launch his or her own company, or you think of somebody on an oh one visa.
Jeff Farrah:
Sure. There are lots of entrepreneurs that end up getting, oh one visas. And, and that’s a, a great thing. And, and certainly a, a bit of a, a way to kind of capture some individuals. But when you’re trying to measure whether or not someone is extraordinary enough to get that, oh, one visa, that means they have to have a certain track record of accomplishment to point it to, to, to the direction of U S C I S, which ultimately is making those decisions that doesn’t work very well. If you’re 23, 24, 25 years old, and this is your first company, or maybe it’s your second company and your first one failed. And so are losing entrepreneurs who are not able to use the categories that we have now, which is why we need to create a category for these individuals who wanna launch these companies so that we don’t lose out on those opportunities going forward.
Denzil Mohammed:
And in their own way, certain states have actually stepped in to try to solve this in Massachusetts. For instance, there’s something of the global entrepreneur residence program, a way to bypass the quarters that would allow high skilled immigrants. Who’ve gone through our university system to be able to stay here and incubate their businesses. Thomas kero, the person I, I mentioned that was his only avenue in order to be able to stay here. How would these startup visas create this ripple effect of employment in the economy?
Jeff Farrah:
Well, I think that, you know, the, the, the economic literature on this is, is very, very clear, which is that the, the, the growth in our economy, the, the dynamism that I referenced before, it comes from young companies as they, they scale and grow. And, and you look at these companies that are five years old or less, and the are the key drivers of employment, where you have a lot of larger companies that are roughly hiring and firing in proportion on an annual basis. And that’s probably going to be the way it’s always going to be. But then a lot of the growth comes from these, these really special high growth young companies. And so we need to figure out a way how it is we get more entrepreneurship, how it is. We convince people that they need to leave their perfectly secure jobs at, at pick a company and jump out and, and do something extraordinary and audacious.
Jeff Farrah:
And so one component of doing that is to allow individuals from other countries who are very interested in following that model to come here, to ultimately do it. And, and so, you know, we, we, we know that foreign board entrepreneurs are, are among the most successful ones. Anecdotally, we also know that immigrants tend to be more entrepreneurial from a lot of the data that’s been published by, I think in the Harvard business review by professor Kerr. And so it’s certainly something that, that seems obvious to us. I, I think that one frustration that we have encountered with a lot of policy makers is this very wrong assumption. That just because the United States has been the, the best place to launch a high growth company in the last 50 years, but that’s necessarily going to be the case in the following 50 years. And that is absolutely not the case.
Jeff Farrah:
We, we cannot afford to rest on our laurels because as I said before, other countries are very, very serious about, about taking this mantle away from us. And we know that entrepreneurs are very influenced by public policy when there are signals that are sent to the market, that is something that, that people ultimately do derive lessons from. And in the case of immigration, if we’re sending up a giant stop sign at our borders to individuals who want to create new companies, those people are dogged individuals, and they will go and start that company in other countries. And there’s new capital available all over the world to do that.
Denzil Mohammed:
It’s so interesting that you talk about this globalization of, of venture capital and, and, and funding and our loss in the, in the rankings in the world. I mean, that’s from 80 something percent to 51%, that’s really astonishing and almost kinda shameful. Describe for me the, the international entrepreneur rule. What is that about?
Jeff Farrah:
Sure. So this is something that NVCA has led on for, for many years. And as I alluded to before, what, when there was comprehensive immigration reform, that was, that was going on in Congress. At one point, it became obvious that that wasn’t going to come to pass. And so what the Obama administration did was it, it asked itself what other tools are out there, where we might be able to, of the path for foreign born entrepreneurs to allow these individuals to create new American companies, but to do that without creating a new visa category. And so what the Obama administration determined is that they could use something called parole authority and parole is used in, in a lot of different contexts to allow individuals from other countries to remain in the United States. And so if you look at the, the statute that that gives the department of Homeland security and, and U S C I S this authority, it talks about the individual needs to provide a so-called significant public benefit to the United States.
Jeff Farrah:
And what the Obama administration did to their credit was they put that in economic context. And they said, when an individual is starting a new company, they are certainly providing a significant public benefit to the United States by way of employment and innovation and, and all the things that that we’ve mentioned before. And so they launched the international entrepreneur role in the final days to allow the department of Homeland security on a case by case basis to look at applications of would be immigrant entrepreneurs and determine whether or not they met a, a series of requirements. And so when president Trump was elected, we, we had a sense that this was going to be tough sledding, just given a lot of the immigration rhetoric that had, had gone on. And so we ended up approaching the Trump administration very early high and really make sure they understood that this was a way to create American jobs here in the country.
Jeff Farrah:
And, and very much should have aligned with, with president Trump’s vision for what he was talking about during that campaign. But unfortunately for us, they didn’t see it that way at all. They made a couple of attempts to repeal it. We ended up filing the first federal lawsuit in the history of BCA against the federal government to block them from, from doing that. We won in federal court, in, in Washington DC. And it was really because of that lawsuit that the international entrepreneur rule was around. Now, we’re in a situation where applicants are starting to apply for, for the international entrepreneur rule. And the final thing I’ll just mention on this is that it was, it was really fantastic that one of the first individuals who ended up getting the, the international entrepreneur real designation was backed by the then board chair of, of, of BCA. So it was a great kind of culmination that you had this individual who was working in the network security field, had a great idea, but was in a bad spot from an immigration perspective. He ended up applying for IER and, and getting it. And so that was very rewarding in to kind of see that happen because of our work, but
Denzil Mohammed:
Looking more broadly at the immigration policies of the last administration. It wasn’t simply a crackdown on unauthorized immigration. They significantly cut legal immigration to the us even the high scaled best and brightest that they claimed they wanted reflect a little bit it on, on what happened over those four years. And, and how, how do you see that as having benefited or hurt the United States?
Jeff Farrah:
Sure. I mean, I think you’ve hit the nail on the head in terms of the, the way it went about. And I think this is something where a lot of the messaging in public from former president Trump, a lot of the individuals in his administrative would talk about illegal immigration as being their focus. And that if individuals just would only go through the, the legal process, then that would be perfectly fine. It’s individuals that didn’t go through the legal process that they had a problem with. But of course that wasn’t what was going on in, in reality, because there was really a two-prong attack that was going on. It was, as they said, ed focused on individuals that perhaps were not going through the process, but simultaneously focused on a lot of individuals that had been waiting in line as folks would would say.
Jeff Farrah:
I think that during the Trump administration, you know, one of the things that, that we were involved with that was, you know, we don’t know, or we cannot quantify rather what types of individuals had a, a painful experience and gave up their, their desire to come to the United States, to either work at a high tech company or to go through a process, to try and become an entrepreneur. And so that’s something where those individuals probably are in other geographies now working on their companies and, and that’s real lost economic value that our country is not going to get back.
Denzil Mohammed:
So I took a look at the white house’s website to see what the Biden Harris administration’s top priorities are, and immigration is one of them. They call it outdated, they call it long broken system. What is the path forward?
Jeff Farrah:
Well, I think, you know, right now we’re in a situation where clearly the president is, is focused both on COVID, but also on the build back better agenda. And that’s dominating the headlines. And, and certainly something that I think Democrats are clearly highly motivated to get this over the finish line during, during this calendar year. And so I think that’s going to be the focus. It, it does not look at this time as if immigration policy is going to be able to be in the build back better act. And, and that really is because of the budget reconciliation tool that the Democrats are using here. And there are a variety of rules that apply to the types of things that can go into that bill. And so, in terms of, of looking forward, you know, this has been an issue that there are a lot of key constituencies, especially within the democratic party that have wanted to make progress in immigration reform for many, many, many years. And it’s been incredibly frustrating. And so I suspect that there will be a concerted effort to make progress on this. I think though that the, the issue will come ultimately what the makeup is of the house and the Senate. And that might be something that, that might frustrate a lot of these efforts going forward. And so I think that, you know, some people are projecting that Republicans are, are likely to take the house. Perhaps they will take the Senate that probably doesn’t, doesn’t lead to a, a positive outcome on immigration reform
Denzil Mohammed:
Is not even necessarily an immigration issue. I mean, it’s, it’s business generation, it’s it’s job creation and it’s inherently American. I think that’s, that’s where it fits into the narrative for me, as far as I see it, but it’s also human issue. It’s, it’s, it’s people who, you know, build up dreams and, and, and need a place where they can act to their ideas for the benefit of the host country. Right.
Jeff Farrah:
I completely agree. And you know, the thing too, is that there, there are these efforts right now going on on a so-called China bill, and it’s gone by a bunch of different names over time.
Denzil Mohammed:
I wish you the best of luck in your advocacy and in your work. And I hope more people do on your coalition to be able to get these things done. We need an immigration system that works for all of us, right?
Jeff Farrah:
We do. I appreciate you shining a light on this, and it’s been a pleasure to be part of the conversation.
Denzil Mohammed:
Jobmakers is a weekly podcast about immigrant entrepreneurship and contribution produced by Pioneer Institute, a think tank Boston and the immigrant learning center in Malden, Massachusetts, a not for profit that gives immigrants a voice. Thanks for joining us for today’s insightful conversation and how welcoming entrepreneurial talent benefits all of us. It’s a good way to end our first year. Jobmakers will take a break for the holidays and return on January 6th with a fascinating interview with the author of “Open: the Story of Human Progress,” on how borders are actually holding us back. Send your questions to Denzil that’s D E N Z I L at Job makerspodcast.org. I’m Denzil Mohammed. See you in 2022 for the next episode of Jobmakers.
Recent Episodes:
This week on “The Learning Curve,” co-hosts Gerard Robinson and Cara Candal talk with Michael Bindas, a senior attorney with the Institute for Justice, who represents the lead plaintiffs in the U.S. Supreme Court case, Carson v. Makin. They discussed last week’s oral arguments, and the background and key legal contours of the case. Bindas described Maine’s school tuitioning program, and the pivotal change in the early 1980s that allowed for the state to discriminate against religious families. They explored the questionable distinction that the U.S. Court of Appeals for the First Circuit drew between religious “status” and “use” in schooling, and the likely impact of the U.S. Supreme Court’s 2020 Espinoza decision, which was a major victory for the Institute for Justice and school choice. Bindas shared what makes him hopeful that the Court will rule in the Carsons’ favor, and what he thinks the next legal steps should be to support K-12 educational choice.
Read Pioneer’s amicus brief and op-ed in support of the plaintiffs in this case.
Stories of the Week: In Colorado, school districts are stepping up recruitment efforts to address the shortage of substitute teachers, and calling on parents to help fill gaps. In New York City, Mayor-elect Eric Adams’ first cabinet-level appointment is Schools Chancellor David Banks, founder of Eagle Academy, who promises to disrupt the bureaucracy.
Guest:
Michael Bindas is a senior attorney with the Institute for Justice (IJ) and leads IJ’s educational choice team. He was part of IJ’s litigation team in Espinoza v. Montana Department of Revenue, in which the U.S. Supreme Court held the exclusion of religious options from Montana’s educational choice program unconstitutional, and he is currently IJ’s lead attorney in Carson v. Makin, challenging Maine’s exclusion of religious options from its town tuitioning program. Prior to joining IJ in 2005, Michael spent three years as an attorney with Perkins Coie. He is a former law clerk to Judge Rhesa Hawkins Barksdale of the U.S. Court of Appeals for the Fifth Circuit and served as an engineer officer in the United States Army and Pennsylvania Army National Guard before beginning his legal career. He received his undergraduate degree from the United States Military Academy and his law degree from the University of Pennsylvania.
Tweet of the Week:
Charter school teachers are more diverse than traditional public school teachers. pic.twitter.com/2GYH9yve4u
— Citizen Chris (@citizenstewart) December 10, 2021
News Links:
New N.Y.C. Schools Chancellor Vows to Tackle Education Bureaucracy
https://www.nytimes.com/2021/12/09/nyregion/david-banks-schools-chancellor.html?smid=tw-share
Colorado schools call on parents to help during substitute teacher shortage
https://www.denverpost.com/2021/12/09/colorado-parents-substitute-teacher-shortage/
Read a Transcript of This Episode
Please excuse typos.
[00:00:00] Gerard Robinson [GR]: Hello listeners. This is Gerard Robinson from beautiful and starting to become very cold Charlottesville, Virginia, for another week of The Learning Curve, where we talk about great ideas, great stories, and have conversations with great people. But of course, none of this would be without the greatest co-host in the United States, Cara Candal.
[00:00:21] Cara: I’ll take it. What I won’t take though, Gerard, is people from Virginia talking about the cold.
[00:00:36] [GR]: I forgot that I’m speaking to someone in Massachusetts. Who’s got roots in Michigan. Yeah, I’ll take that. My kids were like, mom. And then I thought I’m going to consider that request. So, yeah, no, but glad to hear. It’s been a big week. We are ramping up to the holidays. We’ve got a great guest this week.
[00:00:55] I’m sure you were listening to the Carson case. as [00:01:00] I was on. Monday, was it only family? Tuesday? what day is it? Sure. So we’re going be talking to Michael Bendis later today. I know it fits me. It feels like it should be January one, but we’re going to be talking to Michael Bindas and that’s pretty exciting because he just argued in front of the Supreme court.
[00:01:16] So, , yeah, , we’re lucky to have him. And what do you, what are you up to in beautiful Charlottesville, Virginia? Well, the girls are getting ready for the last week of class. My wife is slowly but surely tying up the, last semester for a year in person. UVA law school. I am preparing to finish up work next week, working with teachers and principals on a pretty good project, talking about character education and all those things.
[00:01:44] And, slowly but surely watching and waiting to see who will be the first few appointees to the young administration here in Virginia. I think a lot of people are watching and waiting. And a lot of us in the, , ed reform space have a lot of [00:02:00] suggestions for your new governor, but I’m sure you do for sure.
[00:02:05] So, yeah. and what else is on your radar as we head into this, holiday season, which is a PA I don’t know, seems to be long to make this year, but that’s, maybe that’s just me with three children. Well on the family side, we’re going to hang out with the grandparents on Christmas day, and then we’re going to spend some time here with each other.
[00:02:23] And, , even though it’s still cold, , we’ll still get out and see family and friends and all those goodies. So it’ll be good time. What about you, saying, hosting, cooking, doing all of the things and I’m rapping, lots and lots of. So, yeah, but looking forward, one of the things I don’t know, Jared, I’m going to, I’ll just hit you with my story of the week, because my story of the week is about parents, which love to talk about parents.
[00:02:49] It’s fantastic. but with my own parents coming into town, , reading this story out of, I guess it’s gotta be the Denver post talking about [00:03:00] how, I mean this just nationwide shortage. Of teachers, right? For so many. How many years have we been saying there’s going to be a teacher shortage and now there really is one.
[00:03:10] And, not only can districts not find teachers they’re leaving in droves for various reasons. They can’t find substitute teachers, Gerard. So this is from the Denver post is, is entitled Colorado schools calling parents to help during substitute teacher shortage. Now, there is a connection here because, Who is in her mid seventies.
[00:03:29] She won’t mind me saying has quite a few friends in Michigan who have taken on substitute teaching. They’ve come out of retirement to fill some voids, in the Detroit area where she lives, same thing is happening here in Denver. And it’s like, they’re looking everywhere. You know, oftentimes districts.
[00:03:45] Substitute teacher pools, folks get into the substitute teaching pool and the hopes of getting a permanent position. And it sounds like many districts are just grasping at straws. Like I don’t mean to be rude, but are we at a point where it’s sort of like, if you have a [00:04:00] pulse, you can be a substitute teacher.
[00:04:02] and that’s of course not what districts want. So they are calling on parents, which I think. It’s an interesting approach, especially as parents are coming off of, , more than a year of having taught their children at home, they’re calling on parents to come in and help as they can. in school districts, Oh, the school districts, charter schools, faith-based schools, private schools are always calling on parents to help in various ways, whether it’s PTO or, , fundraising, whatever it is.
[00:04:28] But here it’s calling on parents to please come in and step in when teachers are sick or when we simply have a shortage, parents are saying. I can’t do it. I might still be taking care of one kid. Who’s not in school. Full-time I might still be taking care of family members or I’m trying to juggle work too.
[00:04:47] so it’s just this compounding problem as we come out of the pandemic and to make matters worse. Parents in Denver who are interested in helping are saying, do you know. It’s really too difficult to make this happen. They have to [00:05:00] jump through all of these hoops to become substitute teachers.
[00:05:03] They have to get special licensing and take, and it’s just a lot of them are saying it’s simply not worth it. If you want me to help, I’m here to help. Make it easier. So, , this is a challenge for districts because of course I joke and saying,, are we just finding somebody who’s breathing to come in and be a substitute teacher?
[00:05:21] And of course, substitute teachers are really important part of the fabric of schools, right. And under normal circumstances, Many schools have substitute teachers who are very well plugged in to what’s going on in a school. And that works well. but so you want to have standards and regulations, meaning that you’re getting quality people to take over, especially if you’re going to be a long-term substitute, but it sounds like in some cases, we have not built systems and structures to help people enter the substitute teaching market, in a way that’s efficient and going to be helpful to school districts, especially during this time of crisis.
[00:05:52] So I found it to be a really interesting story to learn, and maybe my mom will become a substitute teacher at some point, let’s [00:06:00] say, following the lead of all of her friends who are jumping into the pool, but do you think, I think it’s real because I’m hearing the same thing from. Friends of mine who are superintendents and also friends of mine who were in the classroom.
[00:06:14] Many of them said I’m already burnt out, just because of all the things dealing with COVID related dynamics. That’s number one. And then number two, when like Kyle, he doesn’t show up that I either have to take. Her or his class, or we’ve got to bring someone in, well, guess what, if we can’t find any someone now we have to double, which then brings in the challenge of trying to make sure students are distanced safely.
[00:06:38] So there are a lot of things going on, but I do think there’s something that we, as a choice and reform related community, have to take some ownership from while many of us have supported. 2030 some five years school reform, some of our language about accountability and standards while we didn’t mean it to become anti teacher [00:07:00] or anti teaching profession came off that way.
[00:07:03] And now we’re starting to see some of the unintended consequences of some of the seeds that fell on the type of soil we did not want, because when I talked to people about school choice, some people say, you know, I didn’t get involved in education. I was going to teach, but everything was either I’m going to go with charter school or private school, but guess what?
[00:07:22] You guys made the profession pretty bad. So that’s just something for us within the family to think about pretty bad is what you mean. Right. It made it sound really unattractive. Some of our conversation made it seem like teaching. If you don’t teach in a charter or a choice school, when you have to go to a traditional school, good luck, happy hunting.
[00:07:40] When frankly, some of our people don’t like what they call government schools. I think public schools are bad, but we, fed into that. , and I say, I’m oh, you and I aren’t one of the ones who did it intentionally, but that’s just one way to look at it. Number two, who wants to take the chance of going into a school and finding themselves.
[00:07:58] Also possibly [00:08:00] becoming ill even with the shop polling of the story. So I think there’s a deeper dynamic in terms of, and I think you hit on one of the points. We don’t have a strong pipeline when we were in Orlando your organization’s event. I ran into David. I can’t think of David’s last name, but he runs and has for years, a nonprofit organization, that’s focused on alternative certification for bringing teachers into the.
[00:08:25] And I’m sure we’ll find his name, , once we post this, but Dave has been saying this for almost a decade. He said you have to build a pipeline early. Think about this. Think about the number of military personnel who are coming back to places like Virginia, for example, large military state or other parts of the country.
[00:08:43] We have a troops to teacher program. It means that a, we have a template in place, but maybe there’s some things we need to. In order to bring in qualified military personnel to fill some of those gaps. Many of them entered military service for [00:09:00] public service. Education is part of public service and public good.
[00:09:03] So I think that’s one area we can tap into. You talked about our retired teachers, I’m all for and have actually seen. We have a number of retired teachers who are veterans, who would like to come in now wearing my former state hat. One thing states have to watch out for is teachers who are retired working X number of hours per month, and that possibly impacting their retirement benefits.
[00:09:29] And so there’s a nuance that our state chiefs of schools soups I’m sure will work out, but we can do. But just realize there is a point where you’re going to dip into that and teachers going to say no, but you also have former principals who would love to come back into the classroom and teach. So I’ve said a lot of things.
[00:09:49] I just think this is a tough situation. Human bodies enough. I think we have to have a conversation about teaching that makes it more humane, [00:10:00] not just about human being. Well, and I think, that’s right on Jordan. I think we rarely talk about substitute teaching as a pipeline. We rarely as community are really looking at, you know, you think about substitute teaching, it’s something separate, and I will just say one more thing.
[00:10:16] And that is to the point you made about some people still not feeling safe in schools. rates of COVID are different around the country and they’re going to be continued to be different, et cetera. But when you’re bringing folks out of retirement, To teach whether they were former principals or former teachers, or, that could very well be a much more vulnerable population.
[00:10:33] So I think too, that this speaks to, we’ve come off a year and a half of remote learning. This article says that some schools have to go back remote because they simply have a shortage of staff. Well, again, what are we learning from this pandemic about leveraging technology in times of. And so I, would’ve liked to read more about that in this article.
[00:10:54] And hopefully, maybe we’ll have David when we figured out his last name, we will have David on to talk to us about pipelines. [00:11:00] And I think that that’s a very worthy conversation. And speaking of technology listeners, you know, that we’ve interviewed Julie Young, who’s at Arizona state university. I would go to the Pioneer webpage for The Learning Curve, wherever you find us, and then type in Julie Young and listen to what she has to say.
[00:11:18] Cause she’s an expert. We’ve also had a couple of other people on our show. Who’ve talked about using technology because. Whether you like it or not for a whole host of reasons, moral, ethical, otherwise, technology can be your friend. And here is an example where we need a friend like this.
[00:11:36] So thanks for that story. So naturally New Jersey and Virginia will receive a lot of attention because the statewide election, but, we also had an election in New York city for a new mayor and mayor-elect Eric Adams. Former police officer, a member of local government. He’s now in a position where he can do some monumental things.
[00:11:59] And he said [00:12:00] that education to him was pretty important and he at least took one step toward making that a reality by making his first cabinet level appointment. And that is of a gentleman name, David. Who is the new chancellor of New York city schools. Some of you may know of David Banks because of his work with the Eagle Academy in New York City, which started off as a small network of schools, public traditional schools, innovative schools, although not charter, that were created
[00:12:31] in partnership with a Hundred Black Men in the early 2000s, then-Senator Hillary Clinton was at one of the announcements of the school. And so it’s now grown to a network where they have schools in the different burroughs. He started his career in different parts of public-private, but then became a school principal.
[00:12:50] And from a school principal, he worked his way up the system. When the mayor was actually running for office before he was elected, David Banks was one of the people he went to [00:13:00] for advice. So here’s someone who worked in the traditional system of New York city public schools, was a principal, has cache
[00:13:08] With principals and teachers, part of the union and who decided to create a, public school network that wasn’t a charter school because he said, Hey, I want to show that we can do innovative things within the structure of public schools. And I will say amen to that. And he said, now I’m going to step up and become the chancellor.
[00:13:26] Well, I have an opportunity to, I lived in New York for a couple of years in the mid 90s, in fact, when Rudy Crew was the chancellor of schools. I also know Joel Klein, many of you know, that New York City is the largest public school system in the United States, more than a million students, more than a hundred thousand employees.
[00:13:47] , it is a bureaucracy and it is a big place to manage. So many of our listeners will know that New York is a Mayor-0controlled school system, meaning the mayor will appoint the [00:14:00] chancellor that the school board. And that was a change that came about in part during a wave of changes in the eighties and the nineties, the big city school systems from New York.
[00:14:11] To Cleveland, to New York, but also in places like Jersey city and Newark. And so, Joel Klein would have been the first chancellor under the new system. So I wish David luck. I had a chance to meet him, and what I am optimistic about is he’s someone who worked through the system.
[00:14:33] So he’s got some credibility. Number two, he was willing to reform the system by being in the system; three, he’s got a pretty good track record for taking low-income young man, mostly Hispanic and African-American, and moving them off into college to jobs, entrepreneurship. So I wish him luck. I think this is a bold step for the mayor-elect.
[00:14:55] It’s a good signal, but as we know, he’s gonna have to work with stakeholders who kind of like things [00:15:00] the way they are, but there’s one thing he said. And most of what I’m talking about, you’ll find in the New York Times article that our team would put on the webpage – it’s this and I’ll paraphrase. He said if 75%
[00:15:13] of the white students in New York were not doing well in reading, the city would be on fire. But because it’s not 75% white – because it’s 75% black and brown – we kind of accept it as business as usual. What do you think?
Cara: Well, my first thought is to that very last. Are you listening, Boston Public Schools? Just saying this could be getting in trouble today.
[00:15:40] Right? This could be applied to so many of our urban districts, not just urban districts, so many of our districts, right. That we look, we know there’s nothing to see here. Everything’s going okay. And you look underneath the hood and you look at Boston, it’s the kids who attend the exam schools are doing just fine.
[00:15:59] Well, most of them are not children of color. And so I, think his point is very, very well taken. I too, am excited for this. I think that it’s a bold move. It says a lot about the new mayor’s priorities, man. Oh man. I mean, you’re talking about how large New York.
[00:16:18] It’s like that just the city school system that it’s so much bigger , than what any most school districts in America would even have to think about. So I hope that there are ways around what is no doubt, just a lumbering bureaucracy, and that the new chancellor can find a way.
[00:16:40] And I think, others in the position have made earnest attempts to make it happen. And you mentioned Joel Klein. I mean, I think that it’s remembering that mantra. city would be on fire if we were talking about white kids here is really, really important.
[00:16:55] And people who have long worked in a system that some probably [00:17:00] perceive as like a bit intractable, right. to get the work done, on behalf of kids. And especially at this particular moment, this inflection point in American history, it’s a big job ahead and cheers to the man who has agreed to take it on.
[00:17:15] So I like that story of the week, Gerard, and I think that, all eyes are on your home state right now watching the governor. And, in terms of school systems, we’re going to be looking at New York as well. So much to talk about in the months to come. Have you been Boston? Have you returned to the elected board selecting your superintendent or is it still mayoral appointed? Mayor appointed. Okay. And our producer, Jamie gas is going to text me right now and tell me if I’ve missed the news here, but yeah, no, I mean, talk about a system. That’s not, again, I say, how many times do I show, do I say this?
[00:17:50] This is for another show. But talk about a system that’s got some work to do. And, it’s not discussed here in the Commonwealth because we sort of, we have this tendency [00:18:00] in the Bay State to say like, oh, but we’re number one, and then look away from what’s really going on under the hood.
[00:18:05] Coming up, Gerard, we are going to be talking to Michael Bindas, which is really exciting because it was just last week that he argued the case, Carson v Makin. So we’re very grateful to Michael Bindas from IJ for taking the time out to chat with, we peons who have not argued in front of the Supreme Court.
[00:18:25] So really looking forward to talking to him, coming up.
[00:18:55] Well listeners, we have got with us today, Michael Bindas. He’s been here [00:19:00] before, and we’re super lucky to have him this week. , as many of you know, he is a senior attorney with the Institute for justice. IJ’s educational choice team, really exciting. Many of you probably listened to him just this past week.
[00:19:14] He’s the lead attorney in Carson v Makin, which is the latest school choice case before the Supreme Court. Michael was also part of IJ’s litigation team in Espinoza v. Montana Department of Revenue in which the US Supreme Court held that the exclusion of religious options from Montana’s educational choice program was unconstitutional.
[00:19:34] Prior to joining IJ in 2005, Michael spent three years as an attorney with Perkins Coie. He is a former law clerk to judge Risa Hawkins Barksdale of the U S Court of Appeals for the fifth circuit and served as an engineer officer in the United States army in Pennsylvania army national guard before.
[00:19:50] Legal career. He received his undergraduate degree from the United States military academy and his law degree from the university of Pennsylvania, Michael Bindas. Thank you for [00:20:00] being with us today and congrats on an excellent job last week. Well, thank you. It’s very kind of you to, say, but thanks for having me, Cara and Gerard. I appreciate the opportunity to talk about educational choice and about Carson v. Makin.
[00:20:15] Yeah, well, no. So we’re not fluffing your ego. You know, a lot of us, nerds were listening and, nerding out. And I have to say I had several texts, chains going with my colleagues. And although I hang out with a group that’s very biased toward school choice. We were like, yeah. This is great. This feels good.
[00:20:32] This feels right. So, it’s very exciting. I want to hear about the plaintiffs, from the case, of course, but just, we’ve got a couple of folks on before who have argued in front of the Supreme court, but like, can you just give me a couple of words, describe that feeling when you you’re, when you’re up arguing before the highest court.
[00:20:50] intimidating and nerve-wracking would, uh, I think the good descriptive, so this was my first time arguing before the court I’ve been involved in, several [00:21:00] cases that had been up there before, but, uh, I hadn’t had the chance to argue. And so, , it was, as you can imagine, very intimidating because you’ve got nine of the greatest legal minds in the country and, , Yeah, for me, just some short dude from New Jersey who has never argued before the court, to stand before them.
[00:21:20] it was humbling. It was intimidating. It was like I said, nerve wracking. but I, don’t think I, uh, you know, did anything too terrible or, or didn’t, hopefully make a clown on myself. You did not. I can attest to that as someone who listened all the way through, you, I have to know.
[00:21:37] And here’s one thing I was thinking I was going to kill me for asking questions off the books, but like, do you sleep the night before? You’re about to argue a case. Is that a thing that people are able to do? I w I thought I was going to have a hard time falling asleep. I got to tell you, , I hadn’t slept as well as I did the night before in quite some time.
[00:21:55] And I don’t know why that is . And I got a good night’s sleep. [00:22:00] I got a good workout in the morning of the argument. And, I don’t know why that is because that’s amazing.
[00:22:11] I love it. I know I wouldn’t sleep, but I’m also never going to be in that position. So Michael let’s refresh everybody’s memory here. So we have talked a lot about the Espinosa case. On this show, but we’ve talked a lot less about this case out of Maine. tell us a little bit about the lead plaintiffs.
[00:22:29] The Carson’s sure the Carson’s are a wonderful family who live in a town called Colin burn, main it’s, close to Bangor and Glen burn does not have a public high school. And in Maine, there are quite a few towns that don’t have public high schools. And if a town doesn’t have a public high school, Or it doesn’t contract with a school to educate, the students from that town.
[00:22:54] Then they have to provide tuition to the family. to in turn, attend the [00:23:00] school of their choice. It can be a public school in a neighboring school district. it can be a private school. It can be in state. It can be out of state. It can even be out of the country and state routinely pays for kids to attend.
[00:23:14] Some of the most kind of elite prep schools throughout the country, , all the kind of blue blood prep schools you hear about in new England, the state has paid for kids to attend some of those schools to attend schools as far away as Colorado, Michigan, California. But there is one type of school that a student can absolutely not select under this program.
[00:23:35] And that is any school that the state deems to be sectarian. And by sectarian, they mean any, any school that provides religious instruction, essentially. , so the Carson’s again, they live in Glenburn, which is one of these tuitioning towns. families from that town because the town doesn’t have a public high school or contract with the school, to educate the resident students, they were entitled [00:24:00] to tuition, assistance under this program.
[00:24:03] But they believed that Bangor Christian school was the best school for their daughter, Olivia. And because they decided to send Olivia to this so-called sectarian school, they could not get this tuition benefit that they were otherwise fully entitled to. , basically they had to make a choice, either choose the school they knew was best for their daughter, which was.
[00:24:29] Christian school or get the tuition benefit, but they couldn’t get both. And another family. another one of the plaintiffs in this case that we represent the Nelson family were in a similar position. They also live in a town, uh, Palermo that doesn’t have a public high school. So they were also entitled to the tuition benefit.
[00:24:49] they likewise desired a religious school for their children, and they knew that that was the best option for them. But they could not afford to go without the [00:25:00] tuition assistance benefit. So they were forced with the same choice that the Carson’s were. , but because they could not afford tuition on their own, they had to forego the school.
[00:25:11] They knew was best for their kids, , and their. constitutional right to select a religious school. And they opted instead to take the tuition assistance benefit again, because they couldn’t afford to go without it. And so, uh, that’s really what means policy? , this non-sectarian requirement the, in the program, does it forces parents , to choose between.
[00:25:34] A right, that they’re entitled to this tuition assistance benefit or their free exercise, right. To select the school, you know, the religious school that they believe is best for their children, but they can’t have both. And government simply doesn’t have any business putting families to that kind of choice.
[00:25:52] I want to go back for a minute because correct me if I’m wrong. So Maine’s school tuitioning program has been around for a [00:26:00] really long time. And when it was first established back in 1873, there was a faith faith-based option. There was a religious option wasn’t there. And then it was in the eighties that the legislature and the state attorney general said that we’re not going to do this anymore.
[00:26:14] Is that correct? And if so, can you talk about this part of. Yeah, it’s a great question and great point for more than a century, religious schools were allowed to participate in this program and students routinely, chose religious schools alongside their non-religious counterparts. And. Great because you had a fully diverse array of choices for students to select from, and for parents that think, you know, a religious education is right for the kids.
[00:26:45] they were empowered to choose that. But in 1980, in response to an inquiry from a state legislator, the main attorney general issued an opinion, claiming that it was unconstitutional under the [00:27:00] federal constitution to allow religious schools to participate in the program. If it wasn’t clear back then, that that was just an incorrect, legal conclusion.
[00:27:12] It certainly became clear that that was incorrect, in, you know, the year subsequent to 1980 as the Supreme court in a number of cases held that is perfectly fine for religious schools to participate alongside their non-religious counterparts in programs like this, that operate on private parental choice.
[00:27:33] But nevertheless, so, you know, you had a century plus of, parents being allowed to select religious schools under the program. Now, all of a sudden in 1980, , the state does a complete reverse course and the impact of that decision. was tremendous. , you have a great example of what happened in the wake of that decision.
[00:27:53] There was a school called John Baptist high school. It was a Catholic school that at the time in 1980, [00:28:00] educated more, , students receiving this tuition benefit than any other religious school in the state. And once the state announced this new policy, that religious schools would no longer be able to participate, John.
[00:28:13] The high school was forced with a choice. , it could either. Maintain its Catholic identity and no longer be able to educate these students, , who were receiving the tuition benefit and who couldn’t otherwise afford to remain in the school without that benefit, or it could shed its Catholic identity and continue to educate those students.
[00:28:37] And it had to make that decision and it shows the latter. It actually had to shut down and reopen as a non. Secular high school so that these students, wouldn’t be out of, the great education that they were receiving. And again, that’s the sort of choice that government has no business putting citizens or schools to.
[00:28:59] it [00:29:00] is perfectly permissible for religious options, , to be provided in these types of programs. And when Maine made that decision to take those options away, It quite literally forced, , at least one religious school to shutter its doors and reopen as something. It wasn’t a, as a secular school, just so that students would not be kind of put out on the street and, be out of this, great education that they had been receiving.
[00:29:28] Yeah. Well, it seems clear there that at least the school was trying to operate in the best interest of students, even though it had to make a great sacrifice. It’s listening to you speak to I’m reminded of what’s going on, right. In DC with the build back better bill where they’ve structured.
[00:29:41] Pre-kindergarten to be so that it will look like some faith-based preschools could be direct recipients of federal aid and face the same choice. So, no, this is a, different show, Michael, I digress, but, um, I’ve seen that keeps recurring. So now I wanna, ask you about when [00:30:00] the United States court of appeals for the first circuit, Jamie gas and I, we got to attended that hearing here in Boston, when they heard the case. So, and this is something, again, that school choice nerds will definitely want to hear about there’s this claim in the ruling that religious schools actually weren’t discriminated against in inmates, on tuition program, as long as they didn’t cause.
[00:30:22] Religious instruction, which one would think, okay, a, that’s a little bit of a head-scratcher because if you’re a religious school, that’s kind of what you do, but so they were making this distinction between religious studies. And use in schooling. So can you like break that down in a way that like my mom who has no interest in such issues could understand it?
[00:30:42] Well, I’m not, I’m not sure I can understand. Let me try when the first circuit issued its decision four months prior to the first circuit’s decision, the us Supreme court had handed down its decision. In a case you mentioned earlier, Espinoza versus Montana [00:31:00] department of revenue. And what was going on in that case was Montana passed a school choice program.
[00:31:06] the agency charged. administering that program issued a regulation, excluding religious schools from the program. And we challenged that exclusion. We went up to the Supreme court and the Supreme court held the dat exclusion of religious options. And the program was unconstitutional under the us constitution because government cannot single out in exclude schools from a program like that, simply because the schools are religious meaning simply because.
[00:31:36] Have a religious identity or status. And so it seemed in the light of that opinion, that the first circuit would come to a similar conclusion regarding Maine’s, religious exclusion. But what the first circuit did was say, Yeah. We know the Supreme Court just said a state can exclude schools because they are religious [00:32:00] because they have a religious status, but that’s not what Maine is doing here.
[00:32:04] Maine’s not excluding schools because they are related. It’s excluding schools because of the religious things that they do, like provide religious instruction, which, most religious schools do. and in the first circuits, view this distinction between. Excluding a school because it is religious as opposed to excluding a school because of the religious things.
[00:32:30] It does was a constitutionally meaningful distinction. and so basically what the, the first circuit said is we know a state cannot exclude schools simply because they are religious, but we think it’s perfectly fine for a state to exclude schools because they do religious stuff, like teach religion and.
[00:32:53] Essentially the issue that we asked the U S Supreme court to review is can, a state exclude [00:33:00] a school, simply because it does what religious schools do, which is providing. Religious instruction along with all of the other secular, instruction that they provide. and hopefully the Supreme court answers that question correctly.
[00:33:15] But again, I don’t know if that did a good job explaining this suppose the distinction between status and use, but that’s really what it is is can a state, we know a state can’t exclude schools because they are religious. Can it get away with discriminating against schools by claiming
[00:33:31] we’re only keeping them out because of the religious things that they do. Is that permissible discrimination or is that just as unconstitutional as the discrimination that was going on in Espinoza?
[00:33:42] So let’s stick with another state with, an M and the names is Montana.
[00:33:47] So in 2020, the Supreme court ruled in favor of plaintiffs. in the Espinosa case, we had a chance to speak with you and Kendra as well. That was a major victory for [00:34:00] choice and IGA really drove that. Talk to us about the Espinoza decision and its likely impact on the Carson case.
[00:34:10] Yeah. So, as I mentioned, Espinoza kind of resolved this question of whether a state can exclude schools simply because they are religious. I guess technically left open the question of whether a state can do what Maine is doing, which is saying, Hey, we’re not excluding schools because they are religious, but because of the religious things that they do, but critically, there were two things that the court said in Espinosa that I do think.
[00:34:39] Signal what the court is likely to do in Carson. The first thing is , in the opinion for the court, chief justice Roberts noted the fact that some of his colleagues on the court had questioned whether there is a meaningful distinction between discrimination based on religious. And discrimination based on religious [00:35:00] status.
[00:35:00] and he was alluding specifically to justice Gorsuch and justice Thomas who had in, uh, in a couple of concurring opinions, questioned whether there is any distinction at all, or whether this is really just kind of two sides of the same coin. what the chief said in his opinion and Espinosa is we acknowledge the point, meaning we acknowledge this criticism that some of our colleagues that made, but we don’t need to address it in this case.
[00:35:27] So he’s at least recognizing in that language from Espinoza. That, Hey, there’s no distinction to be made here. Maybe, this truly is just a matter of, how you describe what’s going on because as, as Justice Gorsuch famously put it, you can ask, is the state discriminating against Lutherans or is it discriminating against people who do Lutheran stuff?
[00:35:49] it’s the same discrimination either way. And we shouldn’t pretend, that it’s not. And so again, that’s the kind of. Thing and Aspen, I think that kind of perhaps [00:36:00] signals what we might see in Carson is, that the court recognized in the majority opinion that some of the members of the court , have really questioned whether there is any meaningful distinction to be made between religious status and religious use.
[00:36:14] The other thing that the chief did was after holding. Montana’s religious status discrimination had to be subjected to what we call strict scrutiny, which is the most searching form of judicial review of a state law where the law is almost always going to be held unconstitutional unless the government can come up with an extremely compelling interest to justify the law.
[00:36:41] After saying that Montana’s exclusion, which turned on religious status was subject to this strictest level of scrutiny, chief justice Roberts for the court wrote. Nothing we’re saying is meant to suggest that some lesser degree of scrutiny would apply to a law that [00:37:00] discriminated based on religious use.
[00:37:02] again, he didn’t hold that this strict scrutiny, this test, this, most searching level of scrutiny would apply to a religious use based exclusion, but he said nothing in our opinion should be read to suggest that some lesser level of scrutiny would apply. So again, here, he’s saying. . Or at least seems to be saying that the court is going to look just as strongly and justice searchingly at a supposedly US-based exclusion as the court did a status based disclusion and Espinosa.
[00:37:35] And if that’s the case, if the court does apply that same, very stringent level of scrutiny, I don’t see how Maine’s exclusion can survive here. So, you know, it’s a long way of saying. Espinosa doesn’t squarely address the issue here, but there are a couple of things that the court dropped in the opinion that seemed to suggest that the court would view what Maine is doing is just as problematic as [00:38:00] what , Montana was doing in Espanola.
[00:38:02] I’m married to a law professor, someone who actually practice law prior to going into the academy and lawyers do a really good job of going through the detail and analysis of words, which is really important. So for our listeners who aren’t lawyers, I may not follow policy, a great deal. One question, I it from them.
[00:38:22] And in fact, they were pretty excited about talking to you. They said, well, assume that the. Rules and favor of Carson. What will this mean for school choice and religious Liberty from your point? Well, there’s the immediate impact I think, of a good ruling. And then there’s kind of the broader national impact.
[00:38:44] know, of course the immediate impact is going to be in Maine. Parents will finally be able to choose religious schools for their kids. if they believe that’s the best fit for their kid, they’ve been denied that choice for over four decades under this program and they will get that choice [00:39:00] back. So that’s kind of the immediate impact.
[00:39:03] In terms of the kind of broader national significance of a ruling in our favor. I think the most important aspect of that would be this, it would remove one of the key arguments that school choice opponents have relied on in attacking school choice programs for decades. , every time. Uh, state legislature considers adopting a new school choice program.
[00:39:31] We’re expanding an existing school choice program, opponents of school choice, run to the state house and say, you can’t do that. You can’t have a school choice program in this state. Our state doesn’t allow public money to flow to religious schools. Our state constitution, as a Blaine amendment that prohibits any public funding of religious schools and they’ve argued.
[00:39:56] The legislature has to, reject the bill they’re considering, [00:40:00] or at least exclude religious options from any program. If they’re not successful, they’re in defeating the program and the program becomes law. Then they run to the courthouse and they say the same thing. They file a lawsuit, challenging the program, saying you cannot have religious options in these programs.
[00:40:18] They have to be excluded court, shut down this program or. Expel the religious options , from the program. If the court rules correctly in Carson, that argument will be gone. , opponents of school choice will no longer be able to say our state constitution, our Blaine amendment, whatever, state constitutional provision that might be, they will no longer be able to say our constitution.
[00:40:43] Prohibits the inclusion of religious options and these types of programs, because it will be clear as a matter of federal constitutional law that a state cannot exclude religious options from a program like this. And that’s really where the kind of bigger national [00:41:00] implication of a ruling in our favor will be.
[00:41:02] It will remove this argument once. And for all that school choice, opponents continue to make an attacking programs either in the state house or in the courthouse. And legislators will finally be able to rest secure in the notion that they can pass these programs, that these programs will be legally sound.
[00:41:23] And that the inclusion of religious options is not only permissible but required. If you’re going to provide non-religious private options. So I’m in the Commonwealth. We have a new governor LEC. Yuncken new Lieutenant governor AIG as well. They’ve talked about the importance of parental choice, Virginia compared to let’s say a Florida or an Arizona, not in the same league in terms of parental choice, particularly in the private sector, had a lot to do with our constitution.
[00:41:54] So am I. Reading this or reading Intuit that if we get a favorable [00:42:00] win in Carson states, like Virginia will have an opportunity to open up their doors in new ways. And even states like Florida and Arizona, which are very mature and the choice market, they too will be able to take it to the next.
[00:42:15] Absolutely because for so long, in so many states, legislators have heard from school choice opponents, you can’t do it here. You can’t do it. In this state. We have a Blaine amendment. We have state law that prohibits funding of religious schools, et cetera, et cetera, that argument will finally be put to rest.
[00:42:34] If the court rules correctly and legislators will now be able to confidently. Adopt these programs grow these programs and know that whatever provision of state law, whether it’s a Blaine amendment or some other similar provision, that those 10 not be wielded as weapons to take, to attack these programs or to take the educational opportunity that they [00:43:00] provide the students away from those stations.
[00:43:02] . That would be a, let’s just say a nice holiday present or new year’s present to a lot of families. In Virginia, as well as the rest of the country. Well, , I don’t have any other questions, but just want to thank you.
[00:43:14] And IJ, I believe this is your 30th year and work in terms of IJ and people. When they look a hundred years from now and try to identify, how did we come to a point where we actually accepted. parental choice programs in the public and private sector as being just part of our natural quilt of opportunity.
[00:43:35] They’re going to look back and see your work. the work of IJ, the work of his founders, its supporters, and others are saying they were the ones willing to take on the fight in courts when other people did not, or did not believe they can make it work. So thank you for all you do. Thank you.
[00:43:53] And listeners, this has been, , the learning curve with Michael , Michael take care. And [00:44:00] we will, I’m sure be calling you, , when we get the verdict sometime in 2020. And my tweet of the week comes from a, former guests, Citizen Stewart. And what Chris said on December 10th is quote. Charter school teachers are more diverse than traditional public school teachers. That in fact is a fact, the teaching, core is more diverse than the traditional public school systems.
[00:44:29] I would say the same is true for the principal core. So Chris, thank you for the. Yeah, he’s always really good at like, I like reading Chris’s tweets first thing in the morning to remind him, so what we should be talking about and why we do the work. So excellent stuff. All right, Gerard, do you know that this is our last show together of 2020. we’re going to take a little hiatus. I know that you are going to eat very healthily and you are right on track with that healthy diet, but [00:45:00] I’m looking forward to lots of Christmas cookies.
[00:45:02] It’s also girl scout cookie season, which is kind of tragic. I mean, such timing. I’m wishing you and yours, such a wonderful holiday season, , your card is beautiful by the way, your holiday card mine’s in the mail. I can’t say as nice as yours. Yes. It’s really, really courageous photo of your family, but wishing our listeners and wishing you such, , happy holidays, , Merry Christmas.
[00:45:24] If you celebrate it, Hanukkah is already passed and just a wonderful new year. And I think that I have to say I, for one Gerard I’m feeling quite optimistic. About 2022 on so many levels. I think Michael has just given us reason to be optimistic. I think we’re coming out of, what’s been a tough couple of years for all of us, and we’re getting used to this new life as normal.
[00:45:45] And I’m just so grateful to you, my friend, for being able to have this conversation every week. despite the few weeks we take a vacation and to our listeners for continuing to tune in, because if they didn’t do that, [00:46:00] we would just be talking to what we’re talking to each other, but I don’t know, talking to no one.
[00:46:06] So have a wonderful one, Gerard, same to you. And, , my new year’s wish for all of you is that we are healthier, safer, and more content to each other. And Gerard, we are starting off the new year with a bang because we are going to be speaking to the incomparable, Barry Weiss.
[00:46:24] I’m really, really excited about it. And what a great way to kick off 2022 until then. Stay healthy. Wish you great happiness and a wonderful ringing in of the new year. Cheers. Cheers.
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This week on Hubwonk, host Joe Selvaggi talks with Josh Archambault, Pioneer Institute’s Senior Fellow in Healthcare, about the healthcare provisions in the pending Build Back Better Act and their likely impact on the coverage and cost to Americans in the wake of Covid-19.
Guest:
Josh Archambault is President and Founder of Presidents Lane Consulting. He is a Senior Fellow at both the Cicero Institute and Pioneer Institute. His work experience has ranged from work as a Senior Legislative Aide to a governor, Legislative Director for a state senator, to years working for think tanks operating in thirty-five states, and in D.C. He is a regular contributor to the influential Forbes.com blog, The Apothecary. Josh holds a master’s in public policy from Harvard University’s Kennedy School of Government and a B.A. in political studies and economics from Gordon College.
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Read a Transcript of This Episode
Please excuse typos.
Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Framed as a response to the massive disruption created by the COVID 19 pandemic, the US House of Represents recently signed and forwarded to the Senate. The so-called Build Back Better Act. The healthcare provisions in the bill seek to make healthcare more affordable by preserving American Rescue Plan insurance and expanding eligibility and benefits for Medicaid and affordable care act plans. The question for policy analysts is to determine whether the act’s changes target those most in need in the wake of the pandemic, or whether the act’s provisions simply shift costs from the private to the public sector, potentially accelerating the total cost of healthcare in America. I guess today is Josh Archambault, Senior Fellow for Healthcare Policy at Pioneer Institute. Mr. Archambault has written extensively about the federal and state policy response to the pandemic and has analyzed the healthcare provisions in the Build Back Better Act. Josh will share with us his views on the likely impact of this pending legislation and offer insight on how policy makers could design alternative legislation to better serve the needs of healthcare consumers. When I return, I’ll be joined by Pioneer Institute’s Josh Archambault.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now joined by Pioneer Institute’s Senior Fellow on Healthcare Policy, Josh Archambault. Welcome back to Hubwonk, Josh.
Josh Archambault:
It’s really my pleasure to be back, Joe. Thanks.
Joe Selvaggi:
Well, it’s good to have you. We’re gonna talk about some very, very big bills today. We’re gonna talk about what’s recently passed in the house to build the, a back better act. And what has recently passed before that the ARPA American rescue plan act both big, big bills. I think the price tag on Build Back Better is roughly $2 trillion. And a good portion of that has to do with healthcare, which is your expertise. Now let’s start at a very high level when we’re talking aboutBuild Back Better with regard to healthcare – what is the aspiration of this bill? What are we trying to do as it affects healthcare in America?
Josh Archambault:
Great question, Joe. And I think you might get a hundred different answers if you ask members of Congress what they’re trying to. These bills are just so large with so many different provisions. I think the ones that probably are biggest are largely around expanding coverage, kind of quote unquote, building on the ACA or Obamacare. And some of those major provisions in particular make the ACA subsidies available to a lot more Americans up to a much higher income level than were previously available, both in Massachusetts and nationally. So going forward, we’re gonna have a situation where there are employers who are looking at this and saying, should I continue to even offer insurance because many more of their employees now can access these taxpayer funded subsidies. So that’s, that’s a big piece of it. The other one is Democrats efforts in particular, to try to get some sort of coverage option for folks that live in states that have not expanded Medicaid.
Josh Archambault:
And so they open a pathway for those individuals to access the ACA subsidies for the first time as well. And that’s gonna be quite costly versus if you were to extend a coverage to those individuals on Medicaid, which tend to have a much more stricter and lower prices and reimbursements for care, that’s provided, we’re gonna have a very, a large bill as a result of this. In fact, the congressional budget office, when it weighed in said that they expect to have this bill spend about $19,000 per new life, who’s gaining coverage going forward. And unfortunately about 75% of those people already have some sort of coverage. So there’s a lot of shifting around just like there was under the ACA of where people are getting coverage in a very cost costly manner to do so. And so this obviously raises questions about sustainability going forward. Cuz the last piece I would kind of highlight here is what they did to make the bill not look quite as costly is they only made some of these expand temporary only a few years out. And so we’re gonna have the joy of watching if this ends up passing the Senate in some form, similar to what passed the house, we’re gonna be watching this debate play itself out right around election cycles in the near future. Sure.
Joe Selvaggi:
I’ve, I’ve heard many accounts when people try to nail down how much this massive bill will cost. I’ve heard anything as low as 2 trillion. That sounds like a big number, but that’s the low end all the way to 5 trillion. If we were to extend all these subsidies out for 10 years. So let’s, let’s go deeper when we talk about subsidies and trying to get more people on, let’s say Obamacare or the affordable care act. How do we do this? Do we, in a sense write people a check so that they can mail it to the insurance company or what’s the dynamic do we, or do we move them onto like a Medicaid type program where it’s entirely subsidized and, and in a sense waive restrictions, how does the government actually make healthcare more affordable on the ground?
Josh Archambault:
Sure. So the, the way that this is handled is through one small little tweak, if you will, in, in the actual rules and regulations. And so in essence, what the, the house bill did is it said that under the ACA if you have to spend more than 9.5% of your income towards health insurance, towards the cost of health insurance then you could actually access the subsidies. So it’s actually income based. So up to a certain income level, 400% of the federal poverty level. But then, and if you had to spend more than 9.5%, you could also access them. Well, what this bill does is it actually lowers it to 8.5%. So it lowers that threshold. This is the kind of boring details of how who actually qualifies or not. So, so what then actually happens if you fall into one of those buckets, if you’re in one of these states where they’re allowing you to maybe the first time in this income gap previously where you didn’t qualify, well, you go to the ACA you look at and shop the plans and then you pick a plan and then the insurance company will receive a check from the government to cover a certain percentage of, of the cost of the plan.
Josh Archambault:
And as you have a higher income level, it cover covers a little bit less. In essence, though, what ends up happening here is that it the well, the patient or the enrollee is protected from having ever increasing amount of out-of-pocket costs. The insurance company just gets a bigger and bigger check if the goes up. And so there are some serious problems here with sustainability and the cost per life, to be able to cover these individuals and in the house bill, they wanna make it as quote unquote, as affordable as possible. So the out of pocket responsibility, the cost sharing requirements to get all of the technical terms in there for the patients are very, very low. In essence, what that means is larger and larger amounts of taxpayer money is going directly to the insurance company to help pay for and make hold harmless if you will, the individual enrollee, but at the cost to the taxpayers.
Joe Selvaggi:
So I just wanna restate what you said in layman’s terms. So I let’s say I I make a hundred thousand dollars a year and whereas the old test would’ve been eligible for ACA subsidies at it was nine and a half percent. So if they cost more than it cost healthcare costs more than $9,500 to me the subsidies kicking. Now we’ve moved it to eight or eight and a half percent. So it’s 8,000 or $8,500. Then they kick in earlier. But what you’re saying is that portion of my income goes to my insurance company. What goes beyond that? The subsidy itself that’s not constrained. The insurance company says you’ve got a $20,000 premium or a $10,000 premium. There’s no constraint on that. So the government either writes that firm, that insurance firm, a $1,500 check, if it’s a $10,000 premium or a $12,000 check, if it’s a $20,000 premium, do I have that right? Is that the dynamic? So you,
Josh Archambault:
You’re very, very close. Really the percent of your income is actually just whether you qualify or not. Once you then enter the ACA exchange, how much subsidy you get is based on your income. It’s not quite as analogous as you just kind of made connected the dots. So you may actually get more subsidy as a result than you would have paid. This is actually for Massachusetts listeners. This is actually an interesting historical comparison because under RO so-called Romney care in Massachusetts, this whole discussion was very black and white. If you were offered employer based insurance, you could not qualify for a subsidy end of story. And there a rationale behind that was, is they did not want to impact whether employers small employers in particular offered insurance. They wanted to reserve the subsidies to be spent for those that were uninsured or simply were having to buy insurance on their own and could not afford it.
Josh Archambault:
They wanted employers to keep their commitment, to continue to offer insurance. The federal law took a different approach, which we have just kind of talked through different approach that they’ve taken, which is a little bit more complicated to run the math. But the end result is a lot more people, especially under what passed the house, bill a lot more people qualify. And it puts tremendous pressure on those small companies who if you go to any chamber of commerce breakfast or anything else constantly say healthcare costs by far one of my biggest expense. And it is something that they wish would in theory, just kind of go away or have a little bit more certainty for what it used to be 30 years ago or 20 years ago. And so what I think is concerning about potentially what happens if this becomes law long term, is that you have a whole lot of employers who not only have uncertainty about what the federal government’s role is going to be and who qualifies because of the timelines, the temporary timelines that they put into this and business wants certainty.
Josh Archambault:
That’s how they plan and move forward. But second UFS now set up the situation where you have a lot more taxpayer funded money going towards a higher income group of individuals who didn’t qualify for these subsidies long term. And there could be some unintended consequences for the lower income communities or others in which they’re accessing coverage. I is a problem. And the final thing that I would say here, Joe, and wrote a piece about this for Forbes is that there are some concerns that this expansion actually is worse for people with preexisting conditions. Let me explain that for one second, for individuals who have a preexisting condition who are employer based insurance in general, they not only have more robust coverage, but they have lower out-of-pocket costs when we looked at and compared the plans that were on the ACA versus the plans that are typically offered by small employers.
Josh Archambault:
We that for people with preexisting conditions who will, again, the incentives are aligned for them to be pushed into the exchange and off their employer, based insurance for them, they will have fewer options of providers to go see. So their current providers may not be available to them. And second, they will probably pay a lot more money out of pocket under the ACA plans than they would under their employer plans. So there’s some real unintended consequences. I’m not sure Congress has fully internalized as they expand up the subsidy ladder into the increasingly into the middle class.
Joe Selvaggi:
So forgive me, Josh, I’m a little bit confused because again, I used to be an employer and we offered plans for our employees. We were very happy effectively to subsidize individual employees and engendered a sense of loyalty and professionalism. So is, is employer based insurance something we’re trying to encourage or discourage or whether we’re intending to do it, will this have the effect of having more employers provide it or just walk away and say, look because of the uncertainty and because I can’t compete with the federal subsidies I’m gonna get out of the business of ensuring or helping to ensure my employees.
Josh Archambault:
Yeah. These are very good questions, Joe. So there’s probably two conversations to be had on this one. The first one is your first point about is employer based insurance. The model that we actually want going forward. And I’ll just say there are pros and cons to the system. I think that there have been real challenges with the dysfunction that we see in our healthcare market that are slightly, that are driven by, in part, by the way that we have set up the tax benefit nature of employer based insurance. In essence, just to put in a sentence, but the problem is, is that the patient is disconnected from the cost because really the person who is the plan is the HR department or the CEO of the company. So the insurance, company’s not really interested in being patient centered, it’s really interested in what the CEO or the HR department is gonna offer their employees that has led to some big unintended consequences, unfortunately, that has led to some of the dysfunction, but that’s one conversation.
Josh Archambault:
The second conversation relates to this bill in particular, and it says, okay, well, let’s say that first, the sake of argument, we wanna move away from employer based insurance, which is not even the stated goal of what this bill is, but let’s say that is something they intend to do. Is this the best way to accomplish it? And I think the concern is that not only will this lead to a massive erosion for a lot of small businesses to just drop it because they can’t compete with the subsidy, the very generous subsidy that there’s the taxpayer concern long term, as we continue to subsidize write these large checks to insurance companies every single year for the subsidy amount, but is there a better way if we were to transition away from employer based insurance, which I think those right and left economists on the right and left would say there would be some benefit.
Josh Archambault:
I think there would be universal agreement that this is probably not the way to do it because of the blank check nature that the subsidy structure and it’s set up to the insurance companies. I think you would like to see reforms that at least cap the subsidy amount based on your income, just to say, Hey, if you make 150 FPL, this is how much you’re gonna get. If you make 200%, this is how much you’re gonna get. And you know, what the insurance companies would do. They would design plans that meet that subsidy loan instead, right now it’s whatever the Delta is for the subsidy amount, they just keep getting paid more and more. And I think ultimately that’s unsustainable going forward and it’s, it could potentially hurt the patients. And I think tax payers generally speaking, will pull money away from other public priorities, whether it’s infrastructure national, the fence, or anything else, those become a lot harder to pay for when so much of our economy is just being sunk into subsidizing health coverage.
Joe Selvaggi:
I was intrigued by your Forbes article, which did actually say, you know, these are some of the unintended consequences, either some of the victims of the new system. You, you mentioned some earlier us with preexisting conditions are, are far better off in their employer system than, than into an ACA plan. Were you to have the ear of your I guess where this is headed is to the Senate maybe a healthcare committee or a reconciliation committee. What would you rather this be written as what would, what would, in a sense fix the problems that you find the Forbes article?
Josh Archambault:
Yeah, I mean, I think I would have some really candid conversations on whether we want to continue to extend the subsidies up to this middle income class to begin with period because of these unintended consequences. But if they were committed to keeping that upward pressure and expansion of that, then I would first and foremost advocate that they should at least CA the subsidy levels. As I just mentioned, that would at least bring some common sense and rationality to this, that people would then be focused about how do we offer the best product to individuals with a subsidy that meets the budget that has been allocated for this right now, it’s a blank check. And I think unfortunately when you have a blank check and you’re subsidizing something, you get more of things you don’t always want. And so, as a result, we’re seeing higher and higher premiums, larger and larger amounts of money going to health insurance companies.
Josh Archambault:
And we’re not seeing if you’re spending more money, we’d wanna at least see an increase in the quality of care or the efficiency of how the care has developed. I don’t think we’ve seen that since the ACA has passed or even in the last 30 years. So we look across the healthcare system, as we’ve seen premiums go up a hundred percent, 200% in a lot of markets. We haven’t seen that what we see in technology in other industries, an adjustment in efficiency, or increase in quality. And I think that’s ultimately the problem here and why this becomes unsustainable long term is that we’re not seeing that, you know, think about your iPhone. You, you spend a lot more on a smartphone or an iPhone than we did 10 years ago, five years ago. But I think most people would say, yeah, we get a lot more value there.
Josh Archambault:
It’s a computer in your hand, in your pocket. It’s quite amazing what you get for paying a little bit more. Unfortunately, we don’t get a lot of that in healthcare. As a result, we, we see the prices varying significantly for the exact same services. We see them using the same machine that they used 10 years ago, but it’s now charging 10 times more for the same machine. There hasn’t been an increase in technology. So while our healthcare system does have some really innovative areas, I think there’s probably you universal agreement based on personal experience for many of us, but also just looking across at the aggregate there’s significant room for improvement. We don’t want to just keep subsidizing whether it’s just the insurance card or the kinds of care that aren’t delivering more value.
Joe Selvaggi:
So I want to have time to focus what we’re doing here in Massachusetts on, on healthcare. But before we leave the Build Back Better question. I wan to ask, is there anything in the bill? I mean, we’ve talked about subsidies and closing gaps and maybe some of the unintended consequences. Is there anything in there that actually is reform oriented that will, in a sense bring market forces to bear on healthcare, such that we’re getting more value for our, our dollar, or are we simply just throwing more money at a dysfunctional and very expensive system with the hope that consumers will be happy that their insurance bill is smaller.
Josh Archambault:
Yeah. I unfortunately I don’t look at this bill and see a lot of silver linings. I think there’s a couple that I would just highlight. There is some provisions in there for reinsurance programs. And again, these are one of those kind of complicated mechanisms to try to make the cost of insurance more affordable. It doesn’t unfortunately drive down the cost of insurance, but at least helps make sure that individuals are protected from some of the spikes. In essence, reinsurance is you’re able to put my money in and kind of reduce the cost of insurance going forward. So those are roughly 10 billion in the bill to start down that process for states to look at reinsurance programs and a number of states that have started down this route. They have had some success, you know, premiums going down 10, 20%, depending on what the dynamics of what’s going in the market.
Josh Archambault:
In essence, why you wanted do this is for those that are uninsured, that may be younger and cost is a big expense for them. If you’re able to have the premiums be a little bit less, some of them will come off the sideline and your risk profile goes down. You’re a little bit healthier. And so as a result, the premiums are able to go down. So there’s, that’s one mechanism. It’s not a perfect one. Doesn’t not a silver bullet. Doesn’t fix all the problems in healthcare, but it can be an effective way to try to tackle some of this, the increasing premium issue. The other one I might highlight is one of the previous COVID bills had put in place requirement that states could had to stop checking eligibility for those that are on the Medicaid program. And as a result during the public health emergency.
Josh Archambault:
So as a result, there’s a number of individuals who no longer qualify for the program, their income’s too high, they’ve moved out of state number, any number of reasons in that they’re still on the Medicaid program. The insurance companies, the managed care companies are being paid every month for their coverage. And there is a provision in this bill if it were to pass and stay in the Senate version, that’s starting in April of 2022 states could at least restart eligibility. Redeterminations why does this matter? Well, Medicaid is run by states and as a result, the states have to pay a portion of that cost. And so as individuals sit on the program, that means more and more state dollars are going to paying for people who aren’t eligible for the program. And you have to find that money somewhere. So that comes from small businesses who have to pay slightly higher tax rates to pay for that. For individuals, you have to find more or money to pay for that. So I hope that there’s some bipartisan agreement, whether it’s on this bill or another, that we are able to restart the eligibility determinations so that we make sure that we’re only paying for Medicaid coverage for people who are in fact eligible,
Joe Selvaggi:
To be clear, we’re not talking about the proverbial pushing the woman off the cliff in the wheelchair. When we talk about eligibility, we’re talking about people who had had no scrutiny of their Medicaid application during COVID, and now in April of 2022, someone would look at their file and say, look respectfully you make too much to be eligible for Medicaid. You need to be on one of the more either the ACA or something else, is that right?
Josh Archambault:
Correct. Yep. Or an individual has them and think about it in new England. The states are close. If somebody were to move the states don’t do a great job communicating with each other and whether somebody’s moved, they would at least at minimum say, you know, oh, this individual looks like they no longer live in our state. So we’re gonna stop paying the managed care company every month for somebody who is not even here.
Joe Selvaggi:
All right. And of course that money being aid for the person who lives in here is money. That’s not going to schools and roads and police and all the other great things we want from government. So a costly mistake, so that that’s some good news. We were, we had to look around quite a bit, but we found some good news there in the build back, better plan. Let’s focus now on Massachusetts. We’ve we were, I guess, pioneers in the role healthcare reform. And we got quite a bit of money in the American rescue plan act. I think somewhere around $4 billion. We’re talking about that’s being debated up on the top of beacon hill. What can you say about how that might be spent on healthcare here in Massachusetts? What are the issues being debated here?
Josh Archambault:
Sure. So the, the kind of status of where this is, is there has been a $4 billion bill that’s made its way through the legislature. And there’s been a lot of disagreement between the governor about who gets to appropriate this money, or whether it’s the legislature. And the legislature said in 163 page bill we’re, we’re gonna tell you how to spend the, at least the first $4 billion. Now, now mind you additional money went to the states excuse me, to the cities and towns that they have to spend as well. But the state is also funneling some of this money down. And one of the interesting initial observations in some of the press coverage was there was quite a bit of earmarking in this bill that didn’t really seem to be connected to healthcare or COVID related relief, you know refurbishing you know, gazebos in certain towns money going towards Irish, social clubs road repaving, all, all those good sorts of Christmas tree earmarks that we typically see in some of these bills, but, but putting it aside in the grand scheme of things, the book, the bulk of this money, I think, is spent on areas that are public health related or healthcare related there’s millions of dollars spent for on local health boards, $200 million that they’re allocating to local health boards, some for data collection and other infrastructure.
Josh Archambault:
I think there’s really good questions to be had about how did our public health infrastructure work during COVID, what could they have done better? Where did they fail? I think there will be continued debate here on how should this money actually be spent. And are we in a much stronger position going forward? There’s 260 million that is being allocated to finance really strained hospitals. And so again, this has been a perennial issue in the legislature about who qualifies as a financially strained hospital, how well run are these hospitals. And I think Pioneer’s interest here is just around accountability and transparency of how this money will be ultimately spent to make sure that on the back end, after spending these billions of dollar, that we end up with a health system that is stronger and more efficiently run, and this isn’t just kind of being dumped into a black hole here, but there’s a number.
Josh Archambault:
I mean, we could literally spend 30 minutes going through all of the earmarks of money spent on behavioral health loan, re payments for counselors, which there’s certainly a need here. We hear almost to every day of examples in which emergency rooms are strained by behavioral health cases, in which there are not enough behavioral health beds going forward. So it puts hospitals in a tough spot when they’re trying to respond to COVID related issues when they have so many folks that are in crisis from a behavioral health standpoint going forward. So these are, are some of the overarching debates. It’s a lot of money being spent on community healthcare centers and the behavioral health world going forward. The real discussion to be had going going forward is just what sort of tracking and understanding what we have on how the money is actually being spent and whether it’s making a positive impact or just being spent for the sake of spending it.
Joe Selvaggi:
Well. Yeah, well, gosh, I would imagine one could be very sympathetic to the fact that COVID 19 was an extraordinary strain on the healthcare world. So financially stressed firms could either be financially stressed, cuz they’re poorly run or financially stressed because COVID imposed an extraordinary burden on, on that firm, how who’s in the business of around, which is which how, how do we know that we’re not merely subsidizing a, a a dysfunctional healthcare organization or whether they were in the front lines doing battle with COVID and this extraordinary event, once, once we’re past it, they can return to some sense of normalcy and that that money will have been well spent effectively keeping alive, affirm that endured an extraordinary strain.
Josh Archambault:
I think you’re asking exactly the right question, Joe. I’m not sure that there’s a great answers here in this bill or in the conversation on beacon hill. Unfortunately, the political are aligned here to not have some of those tough conversations. I mean, the other debate in this bill that has received some attention has been around payments for essential health workers and who qualifies for that. There’s been some disagreement about the governor’s definition of that versus what the legislature, the legislature tries to set up a commission, a massive commission. I think it’s over 30 people to determine who should qualify and how to get those payments out. And I think this is, this is where this governing gets really complicated, really fast. I think there’s general agreement that most people in the Massachusetts and other states were really appreciative of healthcare workers and others that were coming to work every single day during the most uncertain days of the pandemic and really putting themselves at, at risk.
Josh Archambault:
But once you start to get into conversations around teachers, social workers, foster parents, you know, garbage individuals working outside, I think it gets a little harder in a little trickier to find universal agreement on who gets these additional payments. So whether it’s a large institution being given money, just because they’re a healthcare institution or involved in healthcare, or whether it’s an individual person who the state is determining, they want to now give additional money. I, I think at minimum there needs to be a robust public discussion about this, not just inside the golden dome on beacon hill, but then ultimately I think there needs to be some transparency about, do we actually deliver this money? What, what is a result of this money, particularly for the institutions? Are they actually investing the money so that they’re better prepared for a pandemic long term? Or are they spending this money in a way to just backfill salaries for individuals or others in which there are underlying concerns about whether this is a going concern going forward from the business side.
Joe Selvaggi:
So getting close to the, our the end of our time together. So I always like to ask us particularly around direct policy questions. You mentioned the the governor and, and the legislature having a healthy, lively debate on who, whose prerogative it is to decide where this money is spent. If Josh Archambault were a king for a day or a, an all powerful governor. How would you want to see some of this money spent knowing that you are a healthcare policy expert and, and, and want to see the most value for the buck, the most efficient use of that money to ensure that the most people can be helped? What, what would you do?
Josh Archambault:
Well, I mean, this, this money from the federal government was allocated to try to help with pandemic preparedness. So for me, that would be the first and foremost, my focus, I, I, I think whether gazebos or helping the Wang and Schubert theater with money is probably not going to be near the top of my list. So I think that’s the first thing. And, and, and I think my criteria would be twofold. One is to make sure that we are understanding where there were gaps, where, where were there problems? Was it on the data side? Was it on the infrastructure side? Was it on the communication side? If we were to come into 20, 23 or 2025, what needs to be in place now that we don’t have to make sure that our ability to continue in some sense of normalcy when another pandemic comes, cuz inevitably there will be another one.
Josh Archambault:
How do we make sure that we have that flexibility and infrastructure in place to be able to, as a society and the state move forward? Some of that is related to human infrastructure. We don’t have a enough certain kinds of providers. And so I, I am sympathetic to looking at ways to increase the amount of providers that we need to be flexible. I, I would make sure that there’s a discussion about removing barriers that are in place. Some might have financial implications, some may not. And then finally, I probably wouldn’t spend all the money if we can’t find ways that actually meet towards goals. And so perhaps whether it’s returning the money, whether it’s giving property tax relief, I mean, for individuals that were struggling to get to work there, there is something here to be said that the, the help most helpful thing for them going forward would be some sort of reduction in the cost of their living instead of just spending the money on some of these pet projects going forward. So for me, that’s, I would make sure that we have some pretty strong criteria by which we’re trying to make these decisions looking at how do we best prepare and how do we actually help people that were impacted by the pandemic?
Joe Selvaggi:
Well, I’m gonna ask this, not knowing the answer, but this is, you know, healthcare and healthcare research is part of the policy. Part of the, in a, a pioneer, are you planning on doing any research in, in a sense preparing a plan that said this is what Massachusetts or the, the nation in general should be doing to prepare for the next pandemic if it’s a next year or a hundred years, hence is there any research where we analyze what we did right. And wrong and layout let’s say a, a a menu or a a recipe for moving forward in, in the future.
Josh Archambault:
Yeah. You know, it’s something that we have had conversations about and there’s a lot of our work that I think is very, very relevant to this conversation that, that the complex answer to this though, is that there’s both a federal and a state discussion to be had here. So at the state level, certainly the questions that need to be had are what are the barriers that were in place pre pandemic and maybe still are in place that would allow the state, the health system be a lot more flexible going forward. These are things that we’ve kind of touched on in some of our prior conversations, whether it is across state line telehealth, or making sure that all providers can use telehealth, whether it’s allowing certain providers to have the flexibility, to practice on their own for things that they’ve been trained to do something called scope of prep, instead of always having to be, have oversight or physical oversight, whether it’s the ability for health institutions to have flexibility, to move staff to different sites.
Josh Archambault:
There’s some barriers to that that had to be waived during the pandemic, whether it’s institutions having the flexibility to open more ICU beds without having to go through a massive credit process and application with the state to get permission to do so. There’s a lot of things that the state could do on the policy side moving forward. I, I certainly think pioneers done lots of work in the space around data reporting, whether it is in nursing homes or others, whether there’s certainly a lot of improvement to be made there to make sure that when we do have something pop up, not only is it being flagged for the relevant state authorities, but the public is able to be informed and that data is easily accessible. So people understand what’s what’s going on, where the high risks are, where the cases are coming from, instead of feeling like they’re ill-informed.
Josh Archambault:
And then for our podcast in the future, certainly a conversation to be had about what needs to happen at the CDC at the FDA and vaccine development. If that’s part of a pandemic response that there’s lots of opportunities there, I think for improvement and ways to tweak, even now, it doesn’t have to be for a future pandemic. So people better understand what’s going on, what the risks are. They can properly assess for themselves and their families going forward. And so we can avoid some of the issues that we had in the past, or the fact that governors or others had to wave a lot of these barriers that were in place.
Joe Selvaggi:
It’s interesting. Everything you prescribe, I think is Pioneer’s research going back 20 years many of the provisions you described as being, making us more ready for the next pandemic is just good advice for healthcare in general. So there really doesn’t seem to me by my reckoning and all shows we’ve done on healthcare, and COVID, much light between good healthcare reform and preparation for the next pandemic. They seem like almost identical prescriptions.
Josh Archambault:
I think there’s some truth to that. <Laugh>, I mean, we don’t need to make this overly complicated going forward. You know, when you’re sick, there’s a lot of complexities to that. And so we want to make sure that we have the most flexible dynamic, innovative system that we can have. And a lot of that is looking at incentives and removing barriers to be able to address that, whether it’s COVID-related or whether it’s other chronic condition related.
Joe Selvaggi:
That’s a wonderful place to end the show. We tied it all together with a nice bow at the end. So thank you very much for joining the show. Again, Josh you’re as always a very informed and clear guest and our listeners are grateful for it.
Josh Archambault:
Great. Thanks, Joe.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoyed today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcast, or podcatcher, it would make it easier for others to find Hubwonk if you offer a five-star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
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In Massachusetts, the Know-Nothing amendments prevent more than 100,000 urban families with children in chronically underperforming school districts from receiving scholarship vouchers that would allow them access to additional educational alternatives. These legal barriers, also known as Blaine amendments, restrict government funding from flowing to religiously affiliated organizations in nearly 40 states and are a violation of the first and fourteenth amendments.
The U.S. Supreme Court will hear a case this year, Espinoza v. Montana Department of Revenue, that could end these amendments. In 2018, Pioneer produced a 30-minute documentary on the impact of the Blaine amendments on families in Massachusetts, Georgia, and Michigan.
“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”
“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”
“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”
“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”
In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.
The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.
in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.
Help families like the Costons in Michigan to end the bigoted Blaine amendments in their state that are blocking tuition scholarships and other types of financial support that would make it possible for families to send their children to high-quality schools that are best suited for their children.
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This week on JobMakers, host Denzil Mohammed talks with Jeff Farrah, General Counsel at the National Venture Capital Association, a D.C.-based group that advocates for public policy supportive of American entrepreneurship. They discuss why we should adopt reforms such as a “start-up visa,” allowing immigrant entrepreneurs to stay here in America so we can benefit from the potential job creation, innovation, and economic dynamism of newcomers who graduated from our universities, worked for American companies, or simply have a viable plan to start a business. Jeff knows that immigration and entrepreneurship go hand-in-hand, that immigrants are twice as likely to start a business, and that it’s not just big policy changes that could move the needle, as you’ll learn in this week’s JobMakers.
Guest:
Jeff Farrah serves as General Counsel at NVCA, where he advocates before Congress, the White House, and agencies for pro-entrepreneurship policies and leads in-house legal matters for the association, including management of the NVCA Model Legal Documents. He loves working at the intersection of venture, public policy, and the law. Jeff concurrently serves as Treasurer of VenturePAC, the political action committee of NVCA. Prior to joining NVCA, Jeff was Counsel to the U.S. Senate Committee on Commerce, Science, and Transportation where he advised Chairman John Thune (now Senate Majority Whip) and members of the committee on technology, telecommunications, and Internet policy. His committee perch gave him an invaluable perspective on how policymakers think about technology and its impact on American life. Previously, Jeff served as General Counsel to U.S. Senator Scott Brown, serving as Brown’s top legal and policy advisor on a variety of issues. During the 2012 presidential election, Jeff was a member of Governor Romney’s Trade Policy Advisory Committee. Prior to the Senate, Jeff was an attorney at a leading Washington, DC law firm for international trade matters. His trade law experience includes World Trade Organization Dispute Settlement and trade remedies cases before U.S. agencies. A native of southern California, Jeff earned his Bachelor of Arts degree in Political Science from the University of California, Santa Barbara (Go Gauchos!) and his Juris Doctor from Seattle University School of Law. Jeff was a Visiting Student at Georgetown University Law Center.
Read a Transcript of This Episode
Please excuse typos.
Denzil Mohammed:
I’m Denzil Mohammed. And this is Jobmakers
Denzil Mohammed:
As we’ve established in this podcast, immigration and entrepreneurship go hand in hand, immigrants are twice as likely to start a business. So why then don’t we have a visa allowing immigrant entrepreneurs to stay here? For Jeff Farrah, general counsel at the National Venture Capital Association, a DC-based group that advocates for public policy that supports American entrepreneurship, a so-called start-up visa is a no-brainer for immigrants who went through our universities or worked for American companies, or simply have a viable business plan and want to start a business here. We should be rolling out the red carpet. Instead we reject them and actively deny ourselves job creation, innovation and economic dynamism. Jeff is advocating for a startup visa and other immigration reforms that would bring jobs to America. And he notes that it’s not just big policy changes that could move the needle. As you’ll learn in this week’s Jobmakers. Jeff Farrah, thank you for joining us on Jobmakers. How are you?
Jeff Farrah:
I’m doing well. Denzil. Thanks so much for having me. So
Denzil Mohammed:
Why is immigration such an important issue to the National Venture Capital Association? I see it’s one of your 10 issue areas. Where does it rank and why?
Jeff Farrah:
Well, you know, I kind of think back to a conversation I had with a board member of ours several years ago. And we were walking in, in DC, between meetings at an agency and on the way to Capitol Hill. And we were talking about a lot of the issues on NVCA’s list. And, you know, we said so many, the things you all do were so to us and important to the founders. But when you think about immigration, you’re really talking about the whole company because without these individuals coming to the United States, oftentimes to launch a high-growth startup, that there’s no company in the first place. And so it’s kind of a Genesis moment in some ways. And so I think that, you know, all you have to do is look at the storied history of immigrant entrepreneurs who have launched so many iconic US companies. And it becomes obvious why it is that we really need to make some serious changes in this country, if we’re going to remain the best place in the world to launch a high-growth company.
Denzil Mohammed:
So has it always been a focus of your association or have there been times where it’s taken precedent over others?
Jeff Farrah:
Well, certainly a lot of times with any trade association, we’re a little bit at the whims of what it is that Congress and federal policy makers are doing. And so certainly there are times when immigration is something that is a lot more on the list. And, you know, I’m reminded of course, of the time period during the Obama administration, where there were efforts to pass comprehensive immigration reform reform also happened during the Bush administration, of course, during the 2013 bill that I’m referring to, there was a start up visa that was included in that that NVCA had a lot to do with pushing. It’s certainly been a piece of NVCA’s advocacy work for many decades. And, and this is something where going back about 15 or 20 years, it was a group of venture capitalists that, that really recognized first that we didn’t have a tailor made way to be able to have foreign born entrepreneurs come into the country, that we were very much using these square peg round hole solutions, and that we needed to have a, a more elegant way to allow these individuals who want nothing more than to launch new American enterprises to be able to come to our country.
Jeff Farrah:
And so really ever since then, a startup visa has been something that has been at the forefront. And we’re of course, very interested in, in getting this across the finish line, but I’ve had a number of successes along the way.
Denzil Mohammed:
So this startup visa, you make it sound as though it’s almost inherently American this idea of enterprise and starting a business and creating opportunity. So I see several countries have some for some form of a startup visa. I mean, from Australia and Canada, all the way to Estonia and Lithuania the Netherlands, Singapore, Denmark where is the US on this issue?
Jeff Farrah:
Unfortunately we’re not by far enough along. And I, I think, you know the countries that you’ve mentioned, you know, both in immigration, but in other policy areas too, they they’ve seen all the benefits that, that high growth startups have created in the United States. And our playbook is, is obvious in terms of the things that we have done in this country to create that secret sauce. And so other countries are trying to replicate a lot of the policies that, that we have had historically in this country, but in, in one way, they’ve, they’ve innovated and, and kind of done things that we’ve not been able to do, which is in trying to attract the world’s best entrepreneur entrepreneurs to their shores. And so, despite the fact that we’ve seen this proliferation of other countries creating startup visas, we, we have not in the United States and it’s not cuz it’s a terribly controversial idea.
Jeff Farrah:
In fact, you know, in my time talking with a lot of lawmakers, you don’t really get any pushback on the substantive issue. If you ask people, should we make it easier for individuals who want to create new American companies and give American citizens jobs? Should we allow those people to do some easily? You will probably get 535 members of the house and the Senate to nod an approval. The tricky part though, is that immigration policy tends to be caught up in some other very, very controversial issues. And we’ve been in a, a bit of a dynamic here in the last several years where not much else can move on immigration reform unless the entire package moves. And so the politics tend to be very complicated and it does lead to this unfortunate situation where perhaps some of the low hanging fruit like a startup visa are, are not able to get across line.
Jeff Farrah:
And we’ve certainly tried to come up with, with perhaps creative ways of addressing that, but ultimately have not been able to, to get the, the bill passed. We have been very, very fortunate to have champions on this issue on a bipartisan basis, going back many years, the most recent version of this that viewers should should tell a look at is called the like act from Congresswoman Zoe Larine its the let immigrants kickstart employment act. And this is Ms. LG Green’s latest version of, of a bill. She had done previously to create a start at visa and she both creates a non-immigrant visa and then an immigrant visa that individuals can into. So if you first come on the non-immigrant visa or you come on an oh one, a visa, you can graduate into the immigrant visa on a pathway to citizenship. And then over in the Senate side, there is a, a larger bill called the startup act, which does a number of, of things in startup policy. And that’s from a group of Senator Mark Warner from Virginia, Jerry Moran from Kansas, Amy Klobuchar, Roy Blunt, really a great group of senators. And within that bill, there is also a startup visa. So that really shows that there is the capability of this really getting the attention of people from all different political stripes.
Denzil Mohammed:
I understand this idea of, of it being mired within something that’s so politicized and so contentious immigration. Whereas it’s, it’s such an integral part of who, of what America is. And I, I know of many stories of entrepreneurs or voting entrepreneurs who because of our immigration and were not allowed to stay here and start their companies an educational online resource called Sutori started by a group of three immigrants. It ended up being, you know, two of them had to go to other countries in order to, to continue the business. Only one was, was allowed to stay here. And you, you spoke earlier about, you know, it being such a part of our, of America, America’s secret sauce. So many iconic American brands, Levi’s jeans, Kraft, Coors bear, Budweiser up until Tesla and Google and eBay all founded by immigrants. Explain to me how the startup visa would work and you know, other initiatives that, that you’ll support like us, you know, the idea of stapling, a green card onto college diploma. Mm-Hmm
Jeff Farrah:
Sure, you know, I, I think that a great illustration of how the startup visa works is, is mentioning perhaps a, another famous foreign born entrepreneur. There’s a gentleman named Jyoti Bansal and Jyoti is from India, originally. He came to the United States on an H 1 B visa and he wanted to be an entrepreneur, but he was working under his H1B status. That was the, the authorization that he had to be in the country. And Jyoti has talked publicly about the fact he needed to wait seven years in order to get his green card. Well, of course he couldn’t launch his own company while he was working on an H1B visa. So he needed to have the green card to be able to go and, do that. And so you kind of think about somebody like him, who is unnecessarily waiting to do what they’re probably put on this earth to do, which is to launch a, a high growth company.
Jeff Farrah:
Well, Jyoti finally gets the green card. He launches a company called app dynamics and AppDynamics on the eve of its IPO ended up selling to Cisco for $3.7 billion. And you think about that situation. Well, obviously Jyoti has done a tremendous job of creating value. He’s got lots and lots of employees, a leading American technology company values it at almost $4 billion. And you think to yourself, well, it’s really a shame that we had to wait that additional seven years for that individual to go off on their entrepreneurial journey. And then the other issue that Jyoti has talked about is that he had friends of his during the same time period, that didn’t feel like they could wait all the time that was needed. And so they ended up leaving the country and going and launching new companies in other countries.
Jeff Farrah:
And that is unbelievably frustrating because the United States could have had those companies. We could have had that additional dynamism in the economy. We could have had that employment. We could have had that innovation, the intellectual property, so on and so forth. And I think that, you know, one thing that we’ve spent a lot of time talking with policymakers about is there’s this, there’s this recognition. I think in, in a lot of circles here that the venture has really become globalized in, in many ways, because as I said before, so many countries have copied our playbook and this is a perfectly reasonable thing for them to do, to try and create startup ecosystems in, in their own countries. If you look out over the last 20 years or so ago, the United States used to get about 86% of the global venture capital pie that would go into us startups that number’s been dropping over the course of the last couple decades.
Jeff Farrah:
And the last couple of years, we got about 51% of global of venture capital. Now the total number of course continues to go up. We continue to raise more venture capital here in the United States, which is a good thing, but it also shows that other countries are getting their act together. And they are able to welcome these individuals who are unfortunately not welcomed in the United States with, with something like a startup visa. And so that’s something we’re really trying to fix here because I think that ultimately the visa categories that we have now at our disposal, they’re not made for the entrepreneurial model. You think about an individual who goes to work at a large tech company on an H one B visa. That’s a, a different circumstance as somebody who wants to launch his or her own company, or you think of somebody on an oh one visa.
Jeff Farrah:
Sure. There are lots of entrepreneurs that end up getting, oh one visas. And, and that’s a, a great thing. And, and certainly a, a bit of a, a way to kind of capture some individuals. But when you’re trying to measure whether or not someone is extraordinary enough to get that, oh, one visa, that means they have to have a certain track record of accomplishment to point it to, to, to the direction of U S C I S, which ultimately is making those decisions that doesn’t work very well. If you’re 23, 24, 25 years old, and this is your first company, or maybe it’s your second company and your first one failed. And so are losing entrepreneurs who are not able to use the categories that we have now, which is why we need to create a category for these individuals who wanna launch these companies so that we don’t lose out on those opportunities going forward.
Denzil Mohammed:
And in their own way, certain states have actually stepped in to try to solve this in Massachusetts. For instance, there’s something of the global entrepreneur residence program, a way to bypass the quarters that would allow high skilled immigrants. Who’ve gone through our university system to be able to stay here and incubate their businesses. Thomas kero, the person I, I mentioned that was his only avenue in order to be able to stay here. How would these startup visas create this ripple effect of employment in the economy?
Jeff Farrah:
Well, I think that, you know, the, the, the economic literature on this is, is very, very clear, which is that the, the, the growth in our economy, the, the dynamism that I referenced before, it comes from young companies as they, they scale and grow. And, and you look at these companies that are five years old or less, and the are the key drivers of employment, where you have a lot of larger companies that are roughly hiring and firing in proportion on an annual basis. And that’s probably going to be the way it’s always going to be. But then a lot of the growth comes from these, these really special high growth young companies. And so we need to figure out a way how it is we get more entrepreneurship, how it is. We convince people that they need to leave their perfectly secure jobs at, at pick a company and jump out and, and do something extraordinary and audacious.
Jeff Farrah:
And so one component of doing that is to allow individuals from other countries who are very interested in following that model to come here, to ultimately do it. And, and so, you know, we, we, we know that foreign board entrepreneurs are, are among the most successful ones. Anecdotally, we also know that immigrants tend to be more entrepreneurial from a lot of the data that’s been published by, I think in the Harvard business review by professor Kerr. And so it’s certainly something that, that seems obvious to us. I, I think that one frustration that we have encountered with a lot of policy makers is this very wrong assumption. That just because the United States has been the, the best place to launch a high growth company in the last 50 years, but that’s necessarily going to be the case in the following 50 years. And that is absolutely not the case.
Jeff Farrah:
We, we cannot afford to rest on our laurels because as I said before, other countries are very, very serious about, about taking this mantle away from us. And we know that entrepreneurs are very influenced by public policy when there are signals that are sent to the market, that is something that, that people ultimately do derive lessons from. And in the case of immigration, if we’re sending up a giant stop sign at our borders to individuals who want to create new companies, those people are dogged individuals, and they will go and start that company in other countries. And there’s new capital available all over the world to do that.
Denzil Mohammed:
It’s so interesting that you talk about this globalization of, of venture capital and, and, and funding and our loss in the, in the rankings in the world. I mean, that’s from 80 something percent to 51%, that’s really astonishing and almost kinda shameful. Describe for me the, the international entrepreneur rule. What is that about?
Jeff Farrah:
Sure. So this is something that NVCA has led on for, for many years. And as I alluded to before, what, when there was comprehensive immigration reform, that was, that was going on in Congress. At one point, it became obvious that that wasn’t going to come to pass. And so what the Obama administration did was it, it asked itself what other tools are out there, where we might be able to, of the path for foreign born entrepreneurs to allow these individuals to create new American companies, but to do that without creating a new visa category. And so what the Obama administration determined is that they could use something called parole authority and parole is used in, in a lot of different contexts to allow individuals from other countries to remain in the United States. And so if you look at the, the statute that that gives the department of Homeland security and, and U S C I S this authority, it talks about the individual needs to provide a so-called significant public benefit to the United States.
Jeff Farrah:
And what the Obama administration did to their credit was they put that in economic context. And they said, when an individual is starting a new company, they are certainly providing a significant public benefit to the United States by way of employment and innovation and, and all the things that that we’ve mentioned before. And so they launched the international entrepreneur role in the final days to allow the department of Homeland security on a case by case basis to look at applications of would be immigrant entrepreneurs and determine whether or not they met a, a series of requirements. And so when president Trump was elected, we, we had a sense that this was going to be tough sledding, just given a lot of the immigration rhetoric that had, had gone on. And so we ended up approaching the Trump administration very early high and really make sure they understood that this was a way to create American jobs here in the country.
Jeff Farrah:
And, and very much should have aligned with, with president Trump’s vision for what he was talking about during that campaign. But unfortunately for us, they didn’t see it that way at all. They made a couple of attempts to repeal it. We ended up filing the first federal lawsuit in the history of BCA against the federal government to block them from, from doing that. We won in federal court, in, in Washington DC. And it was really because of that lawsuit that the international entrepreneur rule was around. Now, we’re in a situation where applicants are starting to apply for, for the international entrepreneur rule. And the final thing I’ll just mention on this is that it was, it was really fantastic that one of the first individuals who ended up getting the, the international entrepreneur real designation was backed by the then board chair of, of, of BCA. So it was a great kind of culmination that you had this individual who was working in the network security field, had a great idea, but was in a bad spot from an immigration perspective. He ended up applying for IER and, and getting it. And so that was very rewarding in to kind of see that happen because of our work, but
Denzil Mohammed:
Looking more broadly at the immigration policies of the last administration. It wasn’t simply a crackdown on unauthorized immigration. They significantly cut legal immigration to the us even the high scaled best and brightest that they claimed they wanted reflect a little bit it on, on what happened over those four years. And, and how, how do you see that as having benefited or hurt the United States?
Jeff Farrah:
Sure. I mean, I think you’ve hit the nail on the head in terms of the, the way it went about. And I think this is something where a lot of the messaging in public from former president Trump, a lot of the individuals in his administrative would talk about illegal immigration as being their focus. And that if individuals just would only go through the, the legal process, then that would be perfectly fine. It’s individuals that didn’t go through the legal process that they had a problem with. But of course that wasn’t what was going on in, in reality, because there was really a two-prong attack that was going on. It was, as they said, ed focused on individuals that perhaps were not going through the process, but simultaneously focused on a lot of individuals that had been waiting in line as folks would would say.
Jeff Farrah:
I think that during the Trump administration, you know, one of the things that, that we were involved with that was, you know, we don’t know, or we cannot quantify rather what types of individuals had a, a painful experience and gave up their, their desire to come to the United States, to either work at a high tech company or to go through a process, to try and become an entrepreneur. And so that’s something where those individuals probably are in other geographies now working on their companies and, and that’s real lost economic value that our country is not going to get back.
Denzil Mohammed:
So I took a look at the white house’s website to see what the Biden Harris administration’s top priorities are, and immigration is one of them. They call it outdated, they call it long broken system. What is the path forward?
Jeff Farrah:
Well, I think, you know, right now we’re in a situation where clearly the president is, is focused both on COVID, but also on the build back better agenda. And that’s dominating the headlines. And, and certainly something that I think Democrats are clearly highly motivated to get this over the finish line during, during this calendar year. And so I think that’s going to be the focus. It, it does not look at this time as if immigration policy is going to be able to be in the build back better act. And, and that really is because of the budget reconciliation tool that the Democrats are using here. And there are a variety of rules that apply to the types of things that can go into that bill. And so, in terms of, of looking forward, you know, this has been an issue that there are a lot of key constituencies, especially within the democratic party that have wanted to make progress in immigration reform for many, many, many years. And it’s been incredibly frustrating. And so I suspect that there will be a concerted effort to make progress on this. I think though that the, the issue will come ultimately what the makeup is of the house and the Senate. And that might be something that, that might frustrate a lot of these efforts going forward. And so I think that, you know, some people are projecting that Republicans are, are likely to take the house. Perhaps they will take the Senate that probably doesn’t, doesn’t lead to a, a positive outcome on immigration reform
Denzil Mohammed:
Is not even necessarily an immigration issue. I mean, it’s, it’s business generation, it’s it’s job creation and it’s inherently American. I think that’s, that’s where it fits into the narrative for me, as far as I see it, but it’s also human issue. It’s, it’s, it’s people who, you know, build up dreams and, and, and need a place where they can act to their ideas for the benefit of the host country. Right.
Jeff Farrah:
I completely agree. And you know, the thing too, is that there, there are these efforts right now going on on a so-called China bill, and it’s gone by a bunch of different names over time.
Denzil Mohammed:
I wish you the best of luck in your advocacy and in your work. And I hope more people do on your coalition to be able to get these things done. We need an immigration system that works for all of us, right?
Jeff Farrah:
We do. I appreciate you shining a light on this, and it’s been a pleasure to be part of the conversation.
Denzil Mohammed:
Jobmakers is a weekly podcast about immigrant entrepreneurship and contribution produced by Pioneer Institute, a think tank Boston and the immigrant learning center in Malden, Massachusetts, a not for profit that gives immigrants a voice. Thanks for joining us for today’s insightful conversation and how welcoming entrepreneurial talent benefits all of us. It’s a good way to end our first year. Jobmakers will take a break for the holidays and return on January 6th with a fascinating interview with the author of “Open: the Story of Human Progress,” on how borders are actually holding us back. Send your questions to Denzil that’s D E N Z I L at Job makerspodcast.org. I’m Denzil Mohammed. See you in 2022 for the next episode of Jobmakers.
Recent Episodes:
This week on “The Learning Curve,” co-hosts Gerard Robinson and Cara Candal talk with Michael Bindas, a senior attorney with the Institute for Justice, who represents the lead plaintiffs in the U.S. Supreme Court case, Carson v. Makin. They discussed last week’s oral arguments, and the background and key legal contours of the case. Bindas described Maine’s school tuitioning program, and the pivotal change in the early 1980s that allowed for the state to discriminate against religious families. They explored the questionable distinction that the U.S. Court of Appeals for the First Circuit drew between religious “status” and “use” in schooling, and the likely impact of the U.S. Supreme Court’s 2020 Espinoza decision, which was a major victory for the Institute for Justice and school choice. Bindas shared what makes him hopeful that the Court will rule in the Carsons’ favor, and what he thinks the next legal steps should be to support K-12 educational choice.
Read Pioneer’s amicus brief and op-ed in support of the plaintiffs in this case.
Stories of the Week: In Colorado, school districts are stepping up recruitment efforts to address the shortage of substitute teachers, and calling on parents to help fill gaps. In New York City, Mayor-elect Eric Adams’ first cabinet-level appointment is Schools Chancellor David Banks, founder of Eagle Academy, who promises to disrupt the bureaucracy.
Guest:
Michael Bindas is a senior attorney with the Institute for Justice (IJ) and leads IJ’s educational choice team. He was part of IJ’s litigation team in Espinoza v. Montana Department of Revenue, in which the U.S. Supreme Court held the exclusion of religious options from Montana’s educational choice program unconstitutional, and he is currently IJ’s lead attorney in Carson v. Makin, challenging Maine’s exclusion of religious options from its town tuitioning program. Prior to joining IJ in 2005, Michael spent three years as an attorney with Perkins Coie. He is a former law clerk to Judge Rhesa Hawkins Barksdale of the U.S. Court of Appeals for the Fifth Circuit and served as an engineer officer in the United States Army and Pennsylvania Army National Guard before beginning his legal career. He received his undergraduate degree from the United States Military Academy and his law degree from the University of Pennsylvania.
Tweet of the Week:
Charter school teachers are more diverse than traditional public school teachers. pic.twitter.com/2GYH9yve4u
— Citizen Chris (@citizenstewart) December 10, 2021
News Links:
New N.Y.C. Schools Chancellor Vows to Tackle Education Bureaucracy
https://www.nytimes.com/2021/12/09/nyregion/david-banks-schools-chancellor.html?smid=tw-share
Colorado schools call on parents to help during substitute teacher shortage
https://www.denverpost.com/2021/12/09/colorado-parents-substitute-teacher-shortage/
Read a Transcript of This Episode
Please excuse typos.
[00:00:00] Gerard Robinson [GR]: Hello listeners. This is Gerard Robinson from beautiful and starting to become very cold Charlottesville, Virginia, for another week of The Learning Curve, where we talk about great ideas, great stories, and have conversations with great people. But of course, none of this would be without the greatest co-host in the United States, Cara Candal.
[00:00:21] Cara: I’ll take it. What I won’t take though, Gerard, is people from Virginia talking about the cold.
[00:00:36] [GR]: I forgot that I’m speaking to someone in Massachusetts. Who’s got roots in Michigan. Yeah, I’ll take that. My kids were like, mom. And then I thought I’m going to consider that request. So, yeah, no, but glad to hear. It’s been a big week. We are ramping up to the holidays. We’ve got a great guest this week.
[00:00:55] I’m sure you were listening to the Carson case. as [00:01:00] I was on. Monday, was it only family? Tuesday? what day is it? Sure. So we’re going be talking to Michael Bendis later today. I know it fits me. It feels like it should be January one, but we’re going to be talking to Michael Bindas and that’s pretty exciting because he just argued in front of the Supreme court.
[00:01:16] So, , yeah, , we’re lucky to have him. And what do you, what are you up to in beautiful Charlottesville, Virginia? Well, the girls are getting ready for the last week of class. My wife is slowly but surely tying up the, last semester for a year in person. UVA law school. I am preparing to finish up work next week, working with teachers and principals on a pretty good project, talking about character education and all those things.
[00:01:44] And, slowly but surely watching and waiting to see who will be the first few appointees to the young administration here in Virginia. I think a lot of people are watching and waiting. And a lot of us in the, , ed reform space have a lot of [00:02:00] suggestions for your new governor, but I’m sure you do for sure.
[00:02:05] So, yeah. and what else is on your radar as we head into this, holiday season, which is a PA I don’t know, seems to be long to make this year, but that’s, maybe that’s just me with three children. Well on the family side, we’re going to hang out with the grandparents on Christmas day, and then we’re going to spend some time here with each other.
[00:02:23] And, , even though it’s still cold, , we’ll still get out and see family and friends and all those goodies. So it’ll be good time. What about you, saying, hosting, cooking, doing all of the things and I’m rapping, lots and lots of. So, yeah, but looking forward, one of the things I don’t know, Jared, I’m going to, I’ll just hit you with my story of the week, because my story of the week is about parents, which love to talk about parents.
[00:02:49] It’s fantastic. but with my own parents coming into town, , reading this story out of, I guess it’s gotta be the Denver post talking about [00:03:00] how, I mean this just nationwide shortage. Of teachers, right? For so many. How many years have we been saying there’s going to be a teacher shortage and now there really is one.
[00:03:10] And, not only can districts not find teachers they’re leaving in droves for various reasons. They can’t find substitute teachers, Gerard. So this is from the Denver post is, is entitled Colorado schools calling parents to help during substitute teacher shortage. Now, there is a connection here because, Who is in her mid seventies.
[00:03:29] She won’t mind me saying has quite a few friends in Michigan who have taken on substitute teaching. They’ve come out of retirement to fill some voids, in the Detroit area where she lives, same thing is happening here in Denver. And it’s like, they’re looking everywhere. You know, oftentimes districts.
[00:03:45] Substitute teacher pools, folks get into the substitute teaching pool and the hopes of getting a permanent position. And it sounds like many districts are just grasping at straws. Like I don’t mean to be rude, but are we at a point where it’s sort of like, if you have a [00:04:00] pulse, you can be a substitute teacher.
[00:04:02] and that’s of course not what districts want. So they are calling on parents, which I think. It’s an interesting approach, especially as parents are coming off of, , more than a year of having taught their children at home, they’re calling on parents to come in and help as they can. in school districts, Oh, the school districts, charter schools, faith-based schools, private schools are always calling on parents to help in various ways, whether it’s PTO or, , fundraising, whatever it is.
[00:04:28] But here it’s calling on parents to please come in and step in when teachers are sick or when we simply have a shortage, parents are saying. I can’t do it. I might still be taking care of one kid. Who’s not in school. Full-time I might still be taking care of family members or I’m trying to juggle work too.
[00:04:47] so it’s just this compounding problem as we come out of the pandemic and to make matters worse. Parents in Denver who are interested in helping are saying, do you know. It’s really too difficult to make this happen. They have to [00:05:00] jump through all of these hoops to become substitute teachers.
[00:05:03] They have to get special licensing and take, and it’s just a lot of them are saying it’s simply not worth it. If you want me to help, I’m here to help. Make it easier. So, , this is a challenge for districts because of course I joke and saying,, are we just finding somebody who’s breathing to come in and be a substitute teacher?
[00:05:21] And of course, substitute teachers are really important part of the fabric of schools, right. And under normal circumstances, Many schools have substitute teachers who are very well plugged in to what’s going on in a school. And that works well. but so you want to have standards and regulations, meaning that you’re getting quality people to take over, especially if you’re going to be a long-term substitute, but it sounds like in some cases, we have not built systems and structures to help people enter the substitute teaching market, in a way that’s efficient and going to be helpful to school districts, especially during this time of crisis.
[00:05:52] So I found it to be a really interesting story to learn, and maybe my mom will become a substitute teacher at some point, let’s [00:06:00] say, following the lead of all of her friends who are jumping into the pool, but do you think, I think it’s real because I’m hearing the same thing from. Friends of mine who are superintendents and also friends of mine who were in the classroom.
[00:06:14] Many of them said I’m already burnt out, just because of all the things dealing with COVID related dynamics. That’s number one. And then number two, when like Kyle, he doesn’t show up that I either have to take. Her or his class, or we’ve got to bring someone in, well, guess what, if we can’t find any someone now we have to double, which then brings in the challenge of trying to make sure students are distanced safely.
[00:06:38] So there are a lot of things going on, but I do think there’s something that we, as a choice and reform related community, have to take some ownership from while many of us have supported. 2030 some five years school reform, some of our language about accountability and standards while we didn’t mean it to become anti teacher [00:07:00] or anti teaching profession came off that way.
[00:07:03] And now we’re starting to see some of the unintended consequences of some of the seeds that fell on the type of soil we did not want, because when I talked to people about school choice, some people say, you know, I didn’t get involved in education. I was going to teach, but everything was either I’m going to go with charter school or private school, but guess what?
[00:07:22] You guys made the profession pretty bad. So that’s just something for us within the family to think about pretty bad is what you mean. Right. It made it sound really unattractive. Some of our conversation made it seem like teaching. If you don’t teach in a charter or a choice school, when you have to go to a traditional school, good luck, happy hunting.
[00:07:40] When frankly, some of our people don’t like what they call government schools. I think public schools are bad, but we, fed into that. , and I say, I’m oh, you and I aren’t one of the ones who did it intentionally, but that’s just one way to look at it. Number two, who wants to take the chance of going into a school and finding themselves.
[00:07:58] Also possibly [00:08:00] becoming ill even with the shop polling of the story. So I think there’s a deeper dynamic in terms of, and I think you hit on one of the points. We don’t have a strong pipeline when we were in Orlando your organization’s event. I ran into David. I can’t think of David’s last name, but he runs and has for years, a nonprofit organization, that’s focused on alternative certification for bringing teachers into the.
[00:08:25] And I’m sure we’ll find his name, , once we post this, but Dave has been saying this for almost a decade. He said you have to build a pipeline early. Think about this. Think about the number of military personnel who are coming back to places like Virginia, for example, large military state or other parts of the country.
[00:08:43] We have a troops to teacher program. It means that a, we have a template in place, but maybe there’s some things we need to. In order to bring in qualified military personnel to fill some of those gaps. Many of them entered military service for [00:09:00] public service. Education is part of public service and public good.
[00:09:03] So I think that’s one area we can tap into. You talked about our retired teachers, I’m all for and have actually seen. We have a number of retired teachers who are veterans, who would like to come in now wearing my former state hat. One thing states have to watch out for is teachers who are retired working X number of hours per month, and that possibly impacting their retirement benefits.
[00:09:29] And so there’s a nuance that our state chiefs of schools soups I’m sure will work out, but we can do. But just realize there is a point where you’re going to dip into that and teachers going to say no, but you also have former principals who would love to come back into the classroom and teach. So I’ve said a lot of things.
[00:09:49] I just think this is a tough situation. Human bodies enough. I think we have to have a conversation about teaching that makes it more humane, [00:10:00] not just about human being. Well, and I think, that’s right on Jordan. I think we rarely talk about substitute teaching as a pipeline. We rarely as community are really looking at, you know, you think about substitute teaching, it’s something separate, and I will just say one more thing.
[00:10:16] And that is to the point you made about some people still not feeling safe in schools. rates of COVID are different around the country and they’re going to be continued to be different, et cetera. But when you’re bringing folks out of retirement, To teach whether they were former principals or former teachers, or, that could very well be a much more vulnerable population.
[00:10:33] So I think too, that this speaks to, we’ve come off a year and a half of remote learning. This article says that some schools have to go back remote because they simply have a shortage of staff. Well, again, what are we learning from this pandemic about leveraging technology in times of. And so I, would’ve liked to read more about that in this article.
[00:10:54] And hopefully, maybe we’ll have David when we figured out his last name, we will have David on to talk to us about pipelines. [00:11:00] And I think that that’s a very worthy conversation. And speaking of technology listeners, you know, that we’ve interviewed Julie Young, who’s at Arizona state university. I would go to the Pioneer webpage for The Learning Curve, wherever you find us, and then type in Julie Young and listen to what she has to say.
[00:11:18] Cause she’s an expert. We’ve also had a couple of other people on our show. Who’ve talked about using technology because. Whether you like it or not for a whole host of reasons, moral, ethical, otherwise, technology can be your friend. And here is an example where we need a friend like this.
[00:11:36] So thanks for that story. So naturally New Jersey and Virginia will receive a lot of attention because the statewide election, but, we also had an election in New York city for a new mayor and mayor-elect Eric Adams. Former police officer, a member of local government. He’s now in a position where he can do some monumental things.
[00:11:59] And he said [00:12:00] that education to him was pretty important and he at least took one step toward making that a reality by making his first cabinet level appointment. And that is of a gentleman name, David. Who is the new chancellor of New York city schools. Some of you may know of David Banks because of his work with the Eagle Academy in New York City, which started off as a small network of schools, public traditional schools, innovative schools, although not charter, that were created
[00:12:31] in partnership with a Hundred Black Men in the early 2000s, then-Senator Hillary Clinton was at one of the announcements of the school. And so it’s now grown to a network where they have schools in the different burroughs. He started his career in different parts of public-private, but then became a school principal.
[00:12:50] And from a school principal, he worked his way up the system. When the mayor was actually running for office before he was elected, David Banks was one of the people he went to [00:13:00] for advice. So here’s someone who worked in the traditional system of New York city public schools, was a principal, has cache
[00:13:08] With principals and teachers, part of the union and who decided to create a, public school network that wasn’t a charter school because he said, Hey, I want to show that we can do innovative things within the structure of public schools. And I will say amen to that. And he said, now I’m going to step up and become the chancellor.
[00:13:26] Well, I have an opportunity to, I lived in New York for a couple of years in the mid 90s, in fact, when Rudy Crew was the chancellor of schools. I also know Joel Klein, many of you know, that New York City is the largest public school system in the United States, more than a million students, more than a hundred thousand employees.
[00:13:47] , it is a bureaucracy and it is a big place to manage. So many of our listeners will know that New York is a Mayor-0controlled school system, meaning the mayor will appoint the [00:14:00] chancellor that the school board. And that was a change that came about in part during a wave of changes in the eighties and the nineties, the big city school systems from New York.
[00:14:11] To Cleveland, to New York, but also in places like Jersey city and Newark. And so, Joel Klein would have been the first chancellor under the new system. So I wish David luck. I had a chance to meet him, and what I am optimistic about is he’s someone who worked through the system.
[00:14:33] So he’s got some credibility. Number two, he was willing to reform the system by being in the system; three, he’s got a pretty good track record for taking low-income young man, mostly Hispanic and African-American, and moving them off into college to jobs, entrepreneurship. So I wish him luck. I think this is a bold step for the mayor-elect.
[00:14:55] It’s a good signal, but as we know, he’s gonna have to work with stakeholders who kind of like things [00:15:00] the way they are, but there’s one thing he said. And most of what I’m talking about, you’ll find in the New York Times article that our team would put on the webpage – it’s this and I’ll paraphrase. He said if 75%
[00:15:13] of the white students in New York were not doing well in reading, the city would be on fire. But because it’s not 75% white – because it’s 75% black and brown – we kind of accept it as business as usual. What do you think?
Cara: Well, my first thought is to that very last. Are you listening, Boston Public Schools? Just saying this could be getting in trouble today.
[00:15:40] Right? This could be applied to so many of our urban districts, not just urban districts, so many of our districts, right. That we look, we know there’s nothing to see here. Everything’s going okay. And you look underneath the hood and you look at Boston, it’s the kids who attend the exam schools are doing just fine.
[00:15:59] Well, most of them are not children of color. And so I, think his point is very, very well taken. I too, am excited for this. I think that it’s a bold move. It says a lot about the new mayor’s priorities, man. Oh man. I mean, you’re talking about how large New York.
[00:16:18] It’s like that just the city school system that it’s so much bigger , than what any most school districts in America would even have to think about. So I hope that there are ways around what is no doubt, just a lumbering bureaucracy, and that the new chancellor can find a way.
[00:16:40] And I think, others in the position have made earnest attempts to make it happen. And you mentioned Joel Klein. I mean, I think that it’s remembering that mantra. city would be on fire if we were talking about white kids here is really, really important.
[00:16:55] And people who have long worked in a system that some probably [00:17:00] perceive as like a bit intractable, right. to get the work done, on behalf of kids. And especially at this particular moment, this inflection point in American history, it’s a big job ahead and cheers to the man who has agreed to take it on.
[00:17:15] So I like that story of the week, Gerard, and I think that, all eyes are on your home state right now watching the governor. And, in terms of school systems, we’re going to be looking at New York as well. So much to talk about in the months to come. Have you been Boston? Have you returned to the elected board selecting your superintendent or is it still mayoral appointed? Mayor appointed. Okay. And our producer, Jamie gas is going to text me right now and tell me if I’ve missed the news here, but yeah, no, I mean, talk about a system. That’s not, again, I say, how many times do I show, do I say this?
[00:17:50] This is for another show. But talk about a system that’s got some work to do. And, it’s not discussed here in the Commonwealth because we sort of, we have this tendency [00:18:00] in the Bay State to say like, oh, but we’re number one, and then look away from what’s really going on under the hood.
[00:18:05] Coming up, Gerard, we are going to be talking to Michael Bindas, which is really exciting because it was just last week that he argued the case, Carson v Makin. So we’re very grateful to Michael Bindas from IJ for taking the time out to chat with, we peons who have not argued in front of the Supreme Court.
[00:18:25] So really looking forward to talking to him, coming up.
[00:18:55] Well listeners, we have got with us today, Michael Bindas. He’s been here [00:19:00] before, and we’re super lucky to have him this week. , as many of you know, he is a senior attorney with the Institute for justice. IJ’s educational choice team, really exciting. Many of you probably listened to him just this past week.
[00:19:14] He’s the lead attorney in Carson v Makin, which is the latest school choice case before the Supreme Court. Michael was also part of IJ’s litigation team in Espinoza v. Montana Department of Revenue in which the US Supreme Court held that the exclusion of religious options from Montana’s educational choice program was unconstitutional.
[00:19:34] Prior to joining IJ in 2005, Michael spent three years as an attorney with Perkins Coie. He is a former law clerk to judge Risa Hawkins Barksdale of the U S Court of Appeals for the fifth circuit and served as an engineer officer in the United States army in Pennsylvania army national guard before.
[00:19:50] Legal career. He received his undergraduate degree from the United States military academy and his law degree from the university of Pennsylvania, Michael Bindas. Thank you for [00:20:00] being with us today and congrats on an excellent job last week. Well, thank you. It’s very kind of you to, say, but thanks for having me, Cara and Gerard. I appreciate the opportunity to talk about educational choice and about Carson v. Makin.
[00:20:15] Yeah, well, no. So we’re not fluffing your ego. You know, a lot of us, nerds were listening and, nerding out. And I have to say I had several texts, chains going with my colleagues. And although I hang out with a group that’s very biased toward school choice. We were like, yeah. This is great. This feels good.
[00:20:32] This feels right. So, it’s very exciting. I want to hear about the plaintiffs, from the case, of course, but just, we’ve got a couple of folks on before who have argued in front of the Supreme court, but like, can you just give me a couple of words, describe that feeling when you you’re, when you’re up arguing before the highest court.
[00:20:50] intimidating and nerve-wracking would, uh, I think the good descriptive, so this was my first time arguing before the court I’ve been involved in, several [00:21:00] cases that had been up there before, but, uh, I hadn’t had the chance to argue. And so, , it was, as you can imagine, very intimidating because you’ve got nine of the greatest legal minds in the country and, , Yeah, for me, just some short dude from New Jersey who has never argued before the court, to stand before them.
[00:21:20] it was humbling. It was intimidating. It was like I said, nerve wracking. but I, don’t think I, uh, you know, did anything too terrible or, or didn’t, hopefully make a clown on myself. You did not. I can attest to that as someone who listened all the way through, you, I have to know.
[00:21:37] And here’s one thing I was thinking I was going to kill me for asking questions off the books, but like, do you sleep the night before? You’re about to argue a case. Is that a thing that people are able to do? I w I thought I was going to have a hard time falling asleep. I got to tell you, , I hadn’t slept as well as I did the night before in quite some time.
[00:21:55] And I don’t know why that is . And I got a good night’s sleep. [00:22:00] I got a good workout in the morning of the argument. And, I don’t know why that is because that’s amazing.
[00:22:11] I love it. I know I wouldn’t sleep, but I’m also never going to be in that position. So Michael let’s refresh everybody’s memory here. So we have talked a lot about the Espinosa case. On this show, but we’ve talked a lot less about this case out of Maine. tell us a little bit about the lead plaintiffs.
[00:22:29] The Carson’s sure the Carson’s are a wonderful family who live in a town called Colin burn, main it’s, close to Bangor and Glen burn does not have a public high school. And in Maine, there are quite a few towns that don’t have public high schools. And if a town doesn’t have a public high school, Or it doesn’t contract with a school to educate, the students from that town.
[00:22:54] Then they have to provide tuition to the family. to in turn, attend the [00:23:00] school of their choice. It can be a public school in a neighboring school district. it can be a private school. It can be in state. It can be out of state. It can even be out of the country and state routinely pays for kids to attend.
[00:23:14] Some of the most kind of elite prep schools throughout the country, , all the kind of blue blood prep schools you hear about in new England, the state has paid for kids to attend some of those schools to attend schools as far away as Colorado, Michigan, California. But there is one type of school that a student can absolutely not select under this program.
[00:23:35] And that is any school that the state deems to be sectarian. And by sectarian, they mean any, any school that provides religious instruction, essentially. , so the Carson’s again, they live in Glenburn, which is one of these tuitioning towns. families from that town because the town doesn’t have a public high school or contract with the school, to educate the resident students, they were entitled [00:24:00] to tuition, assistance under this program.
[00:24:03] But they believed that Bangor Christian school was the best school for their daughter, Olivia. And because they decided to send Olivia to this so-called sectarian school, they could not get this tuition benefit that they were otherwise fully entitled to. , basically they had to make a choice, either choose the school they knew was best for their daughter, which was.
[00:24:29] Christian school or get the tuition benefit, but they couldn’t get both. And another family. another one of the plaintiffs in this case that we represent the Nelson family were in a similar position. They also live in a town, uh, Palermo that doesn’t have a public high school. So they were also entitled to the tuition benefit.
[00:24:49] they likewise desired a religious school for their children, and they knew that that was the best option for them. But they could not afford to go without the [00:25:00] tuition assistance benefit. So they were forced with the same choice that the Carson’s were. , but because they could not afford tuition on their own, they had to forego the school.
[00:25:11] They knew was best for their kids, , and their. constitutional right to select a religious school. And they opted instead to take the tuition assistance benefit again, because they couldn’t afford to go without it. And so, uh, that’s really what means policy? , this non-sectarian requirement the, in the program, does it forces parents , to choose between.
[00:25:34] A right, that they’re entitled to this tuition assistance benefit or their free exercise, right. To select the school, you know, the religious school that they believe is best for their children, but they can’t have both. And government simply doesn’t have any business putting families to that kind of choice.
[00:25:52] I want to go back for a minute because correct me if I’m wrong. So Maine’s school tuitioning program has been around for a [00:26:00] really long time. And when it was first established back in 1873, there was a faith faith-based option. There was a religious option wasn’t there. And then it was in the eighties that the legislature and the state attorney general said that we’re not going to do this anymore.
[00:26:14] Is that correct? And if so, can you talk about this part of. Yeah, it’s a great question and great point for more than a century, religious schools were allowed to participate in this program and students routinely, chose religious schools alongside their non-religious counterparts. And. Great because you had a fully diverse array of choices for students to select from, and for parents that think, you know, a religious education is right for the kids.
[00:26:45] they were empowered to choose that. But in 1980, in response to an inquiry from a state legislator, the main attorney general issued an opinion, claiming that it was unconstitutional under the [00:27:00] federal constitution to allow religious schools to participate in the program. If it wasn’t clear back then, that that was just an incorrect, legal conclusion.
[00:27:12] It certainly became clear that that was incorrect, in, you know, the year subsequent to 1980 as the Supreme court in a number of cases held that is perfectly fine for religious schools to participate alongside their non-religious counterparts in programs like this, that operate on private parental choice.
[00:27:33] But nevertheless, so, you know, you had a century plus of, parents being allowed to select religious schools under the program. Now, all of a sudden in 1980, , the state does a complete reverse course and the impact of that decision. was tremendous. , you have a great example of what happened in the wake of that decision.
[00:27:53] There was a school called John Baptist high school. It was a Catholic school that at the time in 1980, [00:28:00] educated more, , students receiving this tuition benefit than any other religious school in the state. And once the state announced this new policy, that religious schools would no longer be able to participate, John.
[00:28:13] The high school was forced with a choice. , it could either. Maintain its Catholic identity and no longer be able to educate these students, , who were receiving the tuition benefit and who couldn’t otherwise afford to remain in the school without that benefit, or it could shed its Catholic identity and continue to educate those students.
[00:28:37] And it had to make that decision and it shows the latter. It actually had to shut down and reopen as a non. Secular high school so that these students, wouldn’t be out of, the great education that they were receiving. And again, that’s the sort of choice that government has no business putting citizens or schools to.
[00:28:59] it [00:29:00] is perfectly permissible for religious options, , to be provided in these types of programs. And when Maine made that decision to take those options away, It quite literally forced, , at least one religious school to shutter its doors and reopen as something. It wasn’t a, as a secular school, just so that students would not be kind of put out on the street and, be out of this, great education that they had been receiving.
[00:29:28] Yeah. Well, it seems clear there that at least the school was trying to operate in the best interest of students, even though it had to make a great sacrifice. It’s listening to you speak to I’m reminded of what’s going on, right. In DC with the build back better bill where they’ve structured.
[00:29:41] Pre-kindergarten to be so that it will look like some faith-based preschools could be direct recipients of federal aid and face the same choice. So, no, this is a, different show, Michael, I digress, but, um, I’ve seen that keeps recurring. So now I wanna, ask you about when [00:30:00] the United States court of appeals for the first circuit, Jamie gas and I, we got to attended that hearing here in Boston, when they heard the case. So, and this is something, again, that school choice nerds will definitely want to hear about there’s this claim in the ruling that religious schools actually weren’t discriminated against in inmates, on tuition program, as long as they didn’t cause.
[00:30:22] Religious instruction, which one would think, okay, a, that’s a little bit of a head-scratcher because if you’re a religious school, that’s kind of what you do, but so they were making this distinction between religious studies. And use in schooling. So can you like break that down in a way that like my mom who has no interest in such issues could understand it?
[00:30:42] Well, I’m not, I’m not sure I can understand. Let me try when the first circuit issued its decision four months prior to the first circuit’s decision, the us Supreme court had handed down its decision. In a case you mentioned earlier, Espinoza versus Montana [00:31:00] department of revenue. And what was going on in that case was Montana passed a school choice program.
[00:31:06] the agency charged. administering that program issued a regulation, excluding religious schools from the program. And we challenged that exclusion. We went up to the Supreme court and the Supreme court held the dat exclusion of religious options. And the program was unconstitutional under the us constitution because government cannot single out in exclude schools from a program like that, simply because the schools are religious meaning simply because.
[00:31:36] Have a religious identity or status. And so it seemed in the light of that opinion, that the first circuit would come to a similar conclusion regarding Maine’s, religious exclusion. But what the first circuit did was say, Yeah. We know the Supreme Court just said a state can exclude schools because they are religious [00:32:00] because they have a religious status, but that’s not what Maine is doing here.
[00:32:04] Maine’s not excluding schools because they are related. It’s excluding schools because of the religious things that they do, like provide religious instruction, which, most religious schools do. and in the first circuits, view this distinction between. Excluding a school because it is religious as opposed to excluding a school because of the religious things.
[00:32:30] It does was a constitutionally meaningful distinction. and so basically what the, the first circuit said is we know a state cannot exclude schools simply because they are religious, but we think it’s perfectly fine for a state to exclude schools because they do religious stuff, like teach religion and.
[00:32:53] Essentially the issue that we asked the U S Supreme court to review is can, a state exclude [00:33:00] a school, simply because it does what religious schools do, which is providing. Religious instruction along with all of the other secular, instruction that they provide. and hopefully the Supreme court answers that question correctly.
[00:33:15] But again, I don’t know if that did a good job explaining this suppose the distinction between status and use, but that’s really what it is is can a state, we know a state can’t exclude schools because they are religious. Can it get away with discriminating against schools by claiming
[00:33:31] we’re only keeping them out because of the religious things that they do. Is that permissible discrimination or is that just as unconstitutional as the discrimination that was going on in Espinoza?
[00:33:42] So let’s stick with another state with, an M and the names is Montana.
[00:33:47] So in 2020, the Supreme court ruled in favor of plaintiffs. in the Espinosa case, we had a chance to speak with you and Kendra as well. That was a major victory for [00:34:00] choice and IGA really drove that. Talk to us about the Espinoza decision and its likely impact on the Carson case.
[00:34:10] Yeah. So, as I mentioned, Espinoza kind of resolved this question of whether a state can exclude schools simply because they are religious. I guess technically left open the question of whether a state can do what Maine is doing, which is saying, Hey, we’re not excluding schools because they are religious, but because of the religious things that they do, but critically, there were two things that the court said in Espinosa that I do think.
[00:34:39] Signal what the court is likely to do in Carson. The first thing is , in the opinion for the court, chief justice Roberts noted the fact that some of his colleagues on the court had questioned whether there is a meaningful distinction between discrimination based on religious. And discrimination based on religious [00:35:00] status.
[00:35:00] and he was alluding specifically to justice Gorsuch and justice Thomas who had in, uh, in a couple of concurring opinions, questioned whether there is any distinction at all, or whether this is really just kind of two sides of the same coin. what the chief said in his opinion and Espinosa is we acknowledge the point, meaning we acknowledge this criticism that some of our colleagues that made, but we don’t need to address it in this case.
[00:35:27] So he’s at least recognizing in that language from Espinoza. That, Hey, there’s no distinction to be made here. Maybe, this truly is just a matter of, how you describe what’s going on because as, as Justice Gorsuch famously put it, you can ask, is the state discriminating against Lutherans or is it discriminating against people who do Lutheran stuff?
[00:35:49] it’s the same discrimination either way. And we shouldn’t pretend, that it’s not. And so again, that’s the kind of. Thing and Aspen, I think that kind of perhaps [00:36:00] signals what we might see in Carson is, that the court recognized in the majority opinion that some of the members of the court , have really questioned whether there is any meaningful distinction to be made between religious status and religious use.
[00:36:14] The other thing that the chief did was after holding. Montana’s religious status discrimination had to be subjected to what we call strict scrutiny, which is the most searching form of judicial review of a state law where the law is almost always going to be held unconstitutional unless the government can come up with an extremely compelling interest to justify the law.
[00:36:41] After saying that Montana’s exclusion, which turned on religious status was subject to this strictest level of scrutiny, chief justice Roberts for the court wrote. Nothing we’re saying is meant to suggest that some lesser degree of scrutiny would apply to a law that [00:37:00] discriminated based on religious use.
[00:37:02] again, he didn’t hold that this strict scrutiny, this test, this, most searching level of scrutiny would apply to a religious use based exclusion, but he said nothing in our opinion should be read to suggest that some lesser level of scrutiny would apply. So again, here, he’s saying. . Or at least seems to be saying that the court is going to look just as strongly and justice searchingly at a supposedly US-based exclusion as the court did a status based disclusion and Espinosa.
[00:37:35] And if that’s the case, if the court does apply that same, very stringent level of scrutiny, I don’t see how Maine’s exclusion can survive here. So, you know, it’s a long way of saying. Espinosa doesn’t squarely address the issue here, but there are a couple of things that the court dropped in the opinion that seemed to suggest that the court would view what Maine is doing is just as problematic as [00:38:00] what , Montana was doing in Espanola.
[00:38:02] I’m married to a law professor, someone who actually practice law prior to going into the academy and lawyers do a really good job of going through the detail and analysis of words, which is really important. So for our listeners who aren’t lawyers, I may not follow policy, a great deal. One question, I it from them.
[00:38:22] And in fact, they were pretty excited about talking to you. They said, well, assume that the. Rules and favor of Carson. What will this mean for school choice and religious Liberty from your point? Well, there’s the immediate impact I think, of a good ruling. And then there’s kind of the broader national impact.
[00:38:44] know, of course the immediate impact is going to be in Maine. Parents will finally be able to choose religious schools for their kids. if they believe that’s the best fit for their kid, they’ve been denied that choice for over four decades under this program and they will get that choice [00:39:00] back. So that’s kind of the immediate impact.
[00:39:03] In terms of the kind of broader national significance of a ruling in our favor. I think the most important aspect of that would be this, it would remove one of the key arguments that school choice opponents have relied on in attacking school choice programs for decades. , every time. Uh, state legislature considers adopting a new school choice program.
[00:39:31] We’re expanding an existing school choice program, opponents of school choice, run to the state house and say, you can’t do that. You can’t have a school choice program in this state. Our state doesn’t allow public money to flow to religious schools. Our state constitution, as a Blaine amendment that prohibits any public funding of religious schools and they’ve argued.
[00:39:56] The legislature has to, reject the bill they’re considering, [00:40:00] or at least exclude religious options from any program. If they’re not successful, they’re in defeating the program and the program becomes law. Then they run to the courthouse and they say the same thing. They file a lawsuit, challenging the program, saying you cannot have religious options in these programs.
[00:40:18] They have to be excluded court, shut down this program or. Expel the religious options , from the program. If the court rules correctly in Carson, that argument will be gone. , opponents of school choice will no longer be able to say our state constitution, our Blaine amendment, whatever, state constitutional provision that might be, they will no longer be able to say our constitution.
[00:40:43] Prohibits the inclusion of religious options and these types of programs, because it will be clear as a matter of federal constitutional law that a state cannot exclude religious options from a program like this. And that’s really where the kind of bigger national [00:41:00] implication of a ruling in our favor will be.
[00:41:02] It will remove this argument once. And for all that school choice, opponents continue to make an attacking programs either in the state house or in the courthouse. And legislators will finally be able to rest secure in the notion that they can pass these programs, that these programs will be legally sound.
[00:41:23] And that the inclusion of religious options is not only permissible but required. If you’re going to provide non-religious private options. So I’m in the Commonwealth. We have a new governor LEC. Yuncken new Lieutenant governor AIG as well. They’ve talked about the importance of parental choice, Virginia compared to let’s say a Florida or an Arizona, not in the same league in terms of parental choice, particularly in the private sector, had a lot to do with our constitution.
[00:41:54] So am I. Reading this or reading Intuit that if we get a favorable [00:42:00] win in Carson states, like Virginia will have an opportunity to open up their doors in new ways. And even states like Florida and Arizona, which are very mature and the choice market, they too will be able to take it to the next.
[00:42:15] Absolutely because for so long, in so many states, legislators have heard from school choice opponents, you can’t do it here. You can’t do it. In this state. We have a Blaine amendment. We have state law that prohibits funding of religious schools, et cetera, et cetera, that argument will finally be put to rest.
[00:42:34] If the court rules correctly and legislators will now be able to confidently. Adopt these programs grow these programs and know that whatever provision of state law, whether it’s a Blaine amendment or some other similar provision, that those 10 not be wielded as weapons to take, to attack these programs or to take the educational opportunity that they [00:43:00] provide the students away from those stations.
[00:43:02] . That would be a, let’s just say a nice holiday present or new year’s present to a lot of families. In Virginia, as well as the rest of the country. Well, , I don’t have any other questions, but just want to thank you.
[00:43:14] And IJ, I believe this is your 30th year and work in terms of IJ and people. When they look a hundred years from now and try to identify, how did we come to a point where we actually accepted. parental choice programs in the public and private sector as being just part of our natural quilt of opportunity.
[00:43:35] They’re going to look back and see your work. the work of IJ, the work of his founders, its supporters, and others are saying they were the ones willing to take on the fight in courts when other people did not, or did not believe they can make it work. So thank you for all you do. Thank you.
[00:43:53] And listeners, this has been, , the learning curve with Michael , Michael take care. And [00:44:00] we will, I’m sure be calling you, , when we get the verdict sometime in 2020. And my tweet of the week comes from a, former guests, Citizen Stewart. And what Chris said on December 10th is quote. Charter school teachers are more diverse than traditional public school teachers. That in fact is a fact, the teaching, core is more diverse than the traditional public school systems.
[00:44:29] I would say the same is true for the principal core. So Chris, thank you for the. Yeah, he’s always really good at like, I like reading Chris’s tweets first thing in the morning to remind him, so what we should be talking about and why we do the work. So excellent stuff. All right, Gerard, do you know that this is our last show together of 2020. we’re going to take a little hiatus. I know that you are going to eat very healthily and you are right on track with that healthy diet, but [00:45:00] I’m looking forward to lots of Christmas cookies.
[00:45:02] It’s also girl scout cookie season, which is kind of tragic. I mean, such timing. I’m wishing you and yours, such a wonderful holiday season, , your card is beautiful by the way, your holiday card mine’s in the mail. I can’t say as nice as yours. Yes. It’s really, really courageous photo of your family, but wishing our listeners and wishing you such, , happy holidays, , Merry Christmas.
[00:45:24] If you celebrate it, Hanukkah is already passed and just a wonderful new year. And I think that I have to say I, for one Gerard I’m feeling quite optimistic. About 2022 on so many levels. I think Michael has just given us reason to be optimistic. I think we’re coming out of, what’s been a tough couple of years for all of us, and we’re getting used to this new life as normal.
[00:45:45] And I’m just so grateful to you, my friend, for being able to have this conversation every week. despite the few weeks we take a vacation and to our listeners for continuing to tune in, because if they didn’t do that, [00:46:00] we would just be talking to what we’re talking to each other, but I don’t know, talking to no one.
[00:46:06] So have a wonderful one, Gerard, same to you. And, , my new year’s wish for all of you is that we are healthier, safer, and more content to each other. And Gerard, we are starting off the new year with a bang because we are going to be speaking to the incomparable, Barry Weiss.
[00:46:24] I’m really, really excited about it. And what a great way to kick off 2022 until then. Stay healthy. Wish you great happiness and a wonderful ringing in of the new year. Cheers. Cheers.
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This week on Hubwonk, host Joe Selvaggi talks with Josh Archambault, Pioneer Institute’s Senior Fellow in Healthcare, about the healthcare provisions in the pending Build Back Better Act and their likely impact on the coverage and cost to Americans in the wake of Covid-19.
Guest:
Josh Archambault is President and Founder of Presidents Lane Consulting. He is a Senior Fellow at both the Cicero Institute and Pioneer Institute. His work experience has ranged from work as a Senior Legislative Aide to a governor, Legislative Director for a state senator, to years working for think tanks operating in thirty-five states, and in D.C. He is a regular contributor to the influential Forbes.com blog, The Apothecary. Josh holds a master’s in public policy from Harvard University’s Kennedy School of Government and a B.A. in political studies and economics from Gordon College.
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Read a Transcript of This Episode
Please excuse typos.
Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Framed as a response to the massive disruption created by the COVID 19 pandemic, the US House of Represents recently signed and forwarded to the Senate. The so-called Build Back Better Act. The healthcare provisions in the bill seek to make healthcare more affordable by preserving American Rescue Plan insurance and expanding eligibility and benefits for Medicaid and affordable care act plans. The question for policy analysts is to determine whether the act’s changes target those most in need in the wake of the pandemic, or whether the act’s provisions simply shift costs from the private to the public sector, potentially accelerating the total cost of healthcare in America. I guess today is Josh Archambault, Senior Fellow for Healthcare Policy at Pioneer Institute. Mr. Archambault has written extensively about the federal and state policy response to the pandemic and has analyzed the healthcare provisions in the Build Back Better Act. Josh will share with us his views on the likely impact of this pending legislation and offer insight on how policy makers could design alternative legislation to better serve the needs of healthcare consumers. When I return, I’ll be joined by Pioneer Institute’s Josh Archambault.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now joined by Pioneer Institute’s Senior Fellow on Healthcare Policy, Josh Archambault. Welcome back to Hubwonk, Josh.
Josh Archambault:
It’s really my pleasure to be back, Joe. Thanks.
Joe Selvaggi:
Well, it’s good to have you. We’re gonna talk about some very, very big bills today. We’re gonna talk about what’s recently passed in the house to build the, a back better act. And what has recently passed before that the ARPA American rescue plan act both big, big bills. I think the price tag on Build Back Better is roughly $2 trillion. And a good portion of that has to do with healthcare, which is your expertise. Now let’s start at a very high level when we’re talking aboutBuild Back Better with regard to healthcare – what is the aspiration of this bill? What are we trying to do as it affects healthcare in America?
Josh Archambault:
Great question, Joe. And I think you might get a hundred different answers if you ask members of Congress what they’re trying to. These bills are just so large with so many different provisions. I think the ones that probably are biggest are largely around expanding coverage, kind of quote unquote, building on the ACA or Obamacare. And some of those major provisions in particular make the ACA subsidies available to a lot more Americans up to a much higher income level than were previously available, both in Massachusetts and nationally. So going forward, we’re gonna have a situation where there are employers who are looking at this and saying, should I continue to even offer insurance because many more of their employees now can access these taxpayer funded subsidies. So that’s, that’s a big piece of it. The other one is Democrats efforts in particular, to try to get some sort of coverage option for folks that live in states that have not expanded Medicaid.
Josh Archambault:
And so they open a pathway for those individuals to access the ACA subsidies for the first time as well. And that’s gonna be quite costly versus if you were to extend a coverage to those individuals on Medicaid, which tend to have a much more stricter and lower prices and reimbursements for care, that’s provided, we’re gonna have a very, a large bill as a result of this. In fact, the congressional budget office, when it weighed in said that they expect to have this bill spend about $19,000 per new life, who’s gaining coverage going forward. And unfortunately about 75% of those people already have some sort of coverage. So there’s a lot of shifting around just like there was under the ACA of where people are getting coverage in a very cost costly manner to do so. And so this obviously raises questions about sustainability going forward. Cuz the last piece I would kind of highlight here is what they did to make the bill not look quite as costly is they only made some of these expand temporary only a few years out. And so we’re gonna have the joy of watching if this ends up passing the Senate in some form, similar to what passed the house, we’re gonna be watching this debate play itself out right around election cycles in the near future. Sure.
Joe Selvaggi:
I’ve, I’ve heard many accounts when people try to nail down how much this massive bill will cost. I’ve heard anything as low as 2 trillion. That sounds like a big number, but that’s the low end all the way to 5 trillion. If we were to extend all these subsidies out for 10 years. So let’s, let’s go deeper when we talk about subsidies and trying to get more people on, let’s say Obamacare or the affordable care act. How do we do this? Do we, in a sense write people a check so that they can mail it to the insurance company or what’s the dynamic do we, or do we move them onto like a Medicaid type program where it’s entirely subsidized and, and in a sense waive restrictions, how does the government actually make healthcare more affordable on the ground?
Josh Archambault:
Sure. So the, the way that this is handled is through one small little tweak, if you will, in, in the actual rules and regulations. And so in essence, what the, the house bill did is it said that under the ACA if you have to spend more than 9.5% of your income towards health insurance, towards the cost of health insurance then you could actually access the subsidies. So it’s actually income based. So up to a certain income level, 400% of the federal poverty level. But then, and if you had to spend more than 9.5%, you could also access them. Well, what this bill does is it actually lowers it to 8.5%. So it lowers that threshold. This is the kind of boring details of how who actually qualifies or not. So, so what then actually happens if you fall into one of those buckets, if you’re in one of these states where they’re allowing you to maybe the first time in this income gap previously where you didn’t qualify, well, you go to the ACA you look at and shop the plans and then you pick a plan and then the insurance company will receive a check from the government to cover a certain percentage of, of the cost of the plan.
Josh Archambault:
And as you have a higher income level, it cover covers a little bit less. In essence, though, what ends up happening here is that it the well, the patient or the enrollee is protected from having ever increasing amount of out-of-pocket costs. The insurance company just gets a bigger and bigger check if the goes up. And so there are some serious problems here with sustainability and the cost per life, to be able to cover these individuals and in the house bill, they wanna make it as quote unquote, as affordable as possible. So the out of pocket responsibility, the cost sharing requirements to get all of the technical terms in there for the patients are very, very low. In essence, what that means is larger and larger amounts of taxpayer money is going directly to the insurance company to help pay for and make hold harmless if you will, the individual enrollee, but at the cost to the taxpayers.
Joe Selvaggi:
So I just wanna restate what you said in layman’s terms. So I let’s say I I make a hundred thousand dollars a year and whereas the old test would’ve been eligible for ACA subsidies at it was nine and a half percent. So if they cost more than it cost healthcare costs more than $9,500 to me the subsidies kicking. Now we’ve moved it to eight or eight and a half percent. So it’s 8,000 or $8,500. Then they kick in earlier. But what you’re saying is that portion of my income goes to my insurance company. What goes beyond that? The subsidy itself that’s not constrained. The insurance company says you’ve got a $20,000 premium or a $10,000 premium. There’s no constraint on that. So the government either writes that firm, that insurance firm, a $1,500 check, if it’s a $10,000 premium or a $12,000 check, if it’s a $20,000 premium, do I have that right? Is that the dynamic? So you,
Josh Archambault:
You’re very, very close. Really the percent of your income is actually just whether you qualify or not. Once you then enter the ACA exchange, how much subsidy you get is based on your income. It’s not quite as analogous as you just kind of made connected the dots. So you may actually get more subsidy as a result than you would have paid. This is actually for Massachusetts listeners. This is actually an interesting historical comparison because under RO so-called Romney care in Massachusetts, this whole discussion was very black and white. If you were offered employer based insurance, you could not qualify for a subsidy end of story. And there a rationale behind that was, is they did not want to impact whether employers small employers in particular offered insurance. They wanted to reserve the subsidies to be spent for those that were uninsured or simply were having to buy insurance on their own and could not afford it.
Josh Archambault:
They wanted employers to keep their commitment, to continue to offer insurance. The federal law took a different approach, which we have just kind of talked through different approach that they’ve taken, which is a little bit more complicated to run the math. But the end result is a lot more people, especially under what passed the house, bill a lot more people qualify. And it puts tremendous pressure on those small companies who if you go to any chamber of commerce breakfast or anything else constantly say healthcare costs by far one of my biggest expense. And it is something that they wish would in theory, just kind of go away or have a little bit more certainty for what it used to be 30 years ago or 20 years ago. And so what I think is concerning about potentially what happens if this becomes law long term, is that you have a whole lot of employers who not only have uncertainty about what the federal government’s role is going to be and who qualifies because of the timelines, the temporary timelines that they put into this and business wants certainty.
Josh Archambault:
That’s how they plan and move forward. But second UFS now set up the situation where you have a lot more taxpayer funded money going towards a higher income group of individuals who didn’t qualify for these subsidies long term. And there could be some unintended consequences for the lower income communities or others in which they’re accessing coverage. I is a problem. And the final thing that I would say here, Joe, and wrote a piece about this for Forbes is that there are some concerns that this expansion actually is worse for people with preexisting conditions. Let me explain that for one second, for individuals who have a preexisting condition who are employer based insurance in general, they not only have more robust coverage, but they have lower out-of-pocket costs when we looked at and compared the plans that were on the ACA versus the plans that are typically offered by small employers.
Josh Archambault:
We that for people with preexisting conditions who will, again, the incentives are aligned for them to be pushed into the exchange and off their employer, based insurance for them, they will have fewer options of providers to go see. So their current providers may not be available to them. And second, they will probably pay a lot more money out of pocket under the ACA plans than they would under their employer plans. So there’s some real unintended consequences. I’m not sure Congress has fully internalized as they expand up the subsidy ladder into the increasingly into the middle class.
Joe Selvaggi:
So forgive me, Josh, I’m a little bit confused because again, I used to be an employer and we offered plans for our employees. We were very happy effectively to subsidize individual employees and engendered a sense of loyalty and professionalism. So is, is employer based insurance something we’re trying to encourage or discourage or whether we’re intending to do it, will this have the effect of having more employers provide it or just walk away and say, look because of the uncertainty and because I can’t compete with the federal subsidies I’m gonna get out of the business of ensuring or helping to ensure my employees.
Josh Archambault:
Yeah. These are very good questions, Joe. So there’s probably two conversations to be had on this one. The first one is your first point about is employer based insurance. The model that we actually want going forward. And I’ll just say there are pros and cons to the system. I think that there have been real challenges with the dysfunction that we see in our healthcare market that are slightly, that are driven by, in part, by the way that we have set up the tax benefit nature of employer based insurance. In essence, just to put in a sentence, but the problem is, is that the patient is disconnected from the cost because really the person who is the plan is the HR department or the CEO of the company. So the insurance, company’s not really interested in being patient centered, it’s really interested in what the CEO or the HR department is gonna offer their employees that has led to some big unintended consequences, unfortunately, that has led to some of the dysfunction, but that’s one conversation.
Josh Archambault:
The second conversation relates to this bill in particular, and it says, okay, well, let’s say that first, the sake of argument, we wanna move away from employer based insurance, which is not even the stated goal of what this bill is, but let’s say that is something they intend to do. Is this the best way to accomplish it? And I think the concern is that not only will this lead to a massive erosion for a lot of small businesses to just drop it because they can’t compete with the subsidy, the very generous subsidy that there’s the taxpayer concern long term, as we continue to subsidize write these large checks to insurance companies every single year for the subsidy amount, but is there a better way if we were to transition away from employer based insurance, which I think those right and left economists on the right and left would say there would be some benefit.
Josh Archambault:
I think there would be universal agreement that this is probably not the way to do it because of the blank check nature that the subsidy structure and it’s set up to the insurance companies. I think you would like to see reforms that at least cap the subsidy amount based on your income, just to say, Hey, if you make 150 FPL, this is how much you’re gonna get. If you make 200%, this is how much you’re gonna get. And you know, what the insurance companies would do. They would design plans that meet that subsidy loan instead, right now it’s whatever the Delta is for the subsidy amount, they just keep getting paid more and more. And I think ultimately that’s unsustainable going forward and it’s, it could potentially hurt the patients. And I think tax payers generally speaking, will pull money away from other public priorities, whether it’s infrastructure national, the fence, or anything else, those become a lot harder to pay for when so much of our economy is just being sunk into subsidizing health coverage.
Joe Selvaggi:
I was intrigued by your Forbes article, which did actually say, you know, these are some of the unintended consequences, either some of the victims of the new system. You, you mentioned some earlier us with preexisting conditions are, are far better off in their employer system than, than into an ACA plan. Were you to have the ear of your I guess where this is headed is to the Senate maybe a healthcare committee or a reconciliation committee. What would you rather this be written as what would, what would, in a sense fix the problems that you find the Forbes article?
Josh Archambault:
Yeah, I mean, I think I would have some really candid conversations on whether we want to continue to extend the subsidies up to this middle income class to begin with period because of these unintended consequences. But if they were committed to keeping that upward pressure and expansion of that, then I would first and foremost advocate that they should at least CA the subsidy levels. As I just mentioned, that would at least bring some common sense and rationality to this, that people would then be focused about how do we offer the best product to individuals with a subsidy that meets the budget that has been allocated for this right now, it’s a blank check. And I think unfortunately when you have a blank check and you’re subsidizing something, you get more of things you don’t always want. And so, as a result, we’re seeing higher and higher premiums, larger and larger amounts of money going to health insurance companies.
Josh Archambault:
And we’re not seeing if you’re spending more money, we’d wanna at least see an increase in the quality of care or the efficiency of how the care has developed. I don’t think we’ve seen that since the ACA has passed or even in the last 30 years. So we look across the healthcare system, as we’ve seen premiums go up a hundred percent, 200% in a lot of markets. We haven’t seen that what we see in technology in other industries, an adjustment in efficiency, or increase in quality. And I think that’s ultimately the problem here and why this becomes unsustainable long term is that we’re not seeing that, you know, think about your iPhone. You, you spend a lot more on a smartphone or an iPhone than we did 10 years ago, five years ago. But I think most people would say, yeah, we get a lot more value there.
Josh Archambault:
It’s a computer in your hand, in your pocket. It’s quite amazing what you get for paying a little bit more. Unfortunately, we don’t get a lot of that in healthcare. As a result, we, we see the prices varying significantly for the exact same services. We see them using the same machine that they used 10 years ago, but it’s now charging 10 times more for the same machine. There hasn’t been an increase in technology. So while our healthcare system does have some really innovative areas, I think there’s probably you universal agreement based on personal experience for many of us, but also just looking across at the aggregate there’s significant room for improvement. We don’t want to just keep subsidizing whether it’s just the insurance card or the kinds of care that aren’t delivering more value.
Joe Selvaggi:
So I want to have time to focus what we’re doing here in Massachusetts on, on healthcare. But before we leave the Build Back Better question. I wan to ask, is there anything in the bill? I mean, we’ve talked about subsidies and closing gaps and maybe some of the unintended consequences. Is there anything in there that actually is reform oriented that will, in a sense bring market forces to bear on healthcare, such that we’re getting more value for our, our dollar, or are we simply just throwing more money at a dysfunctional and very expensive system with the hope that consumers will be happy that their insurance bill is smaller.
Josh Archambault:
Yeah. I unfortunately I don’t look at this bill and see a lot of silver linings. I think there’s a couple that I would just highlight. There is some provisions in there for reinsurance programs. And again, these are one of those kind of complicated mechanisms to try to make the cost of insurance more affordable. It doesn’t unfortunately drive down the cost of insurance, but at least helps make sure that individuals are protected from some of the spikes. In essence, reinsurance is you’re able to put my money in and kind of reduce the cost of insurance going forward. So those are roughly 10 billion in the bill to start down that process for states to look at reinsurance programs and a number of states that have started down this route. They have had some success, you know, premiums going down 10, 20%, depending on what the dynamics of what’s going in the market.
Josh Archambault:
In essence, why you wanted do this is for those that are uninsured, that may be younger and cost is a big expense for them. If you’re able to have the premiums be a little bit less, some of them will come off the sideline and your risk profile goes down. You’re a little bit healthier. And so as a result, the premiums are able to go down. So there’s, that’s one mechanism. It’s not a perfect one. Doesn’t not a silver bullet. Doesn’t fix all the problems in healthcare, but it can be an effective way to try to tackle some of this, the increasing premium issue. The other one I might highlight is one of the previous COVID bills had put in place requirement that states could had to stop checking eligibility for those that are on the Medicaid program. And as a result during the public health emergency.
Josh Archambault:
So as a result, there’s a number of individuals who no longer qualify for the program, their income’s too high, they’ve moved out of state number, any number of reasons in that they’re still on the Medicaid program. The insurance companies, the managed care companies are being paid every month for their coverage. And there is a provision in this bill if it were to pass and stay in the Senate version, that’s starting in April of 2022 states could at least restart eligibility. Redeterminations why does this matter? Well, Medicaid is run by states and as a result, the states have to pay a portion of that cost. And so as individuals sit on the program, that means more and more state dollars are going to paying for people who aren’t eligible for the program. And you have to find that money somewhere. So that comes from small businesses who have to pay slightly higher tax rates to pay for that. For individuals, you have to find more or money to pay for that. So I hope that there’s some bipartisan agreement, whether it’s on this bill or another, that we are able to restart the eligibility determinations so that we make sure that we’re only paying for Medicaid coverage for people who are in fact eligible,
Joe Selvaggi:
To be clear, we’re not talking about the proverbial pushing the woman off the cliff in the wheelchair. When we talk about eligibility, we’re talking about people who had had no scrutiny of their Medicaid application during COVID, and now in April of 2022, someone would look at their file and say, look respectfully you make too much to be eligible for Medicaid. You need to be on one of the more either the ACA or something else, is that right?
Josh Archambault:
Correct. Yep. Or an individual has them and think about it in new England. The states are close. If somebody were to move the states don’t do a great job communicating with each other and whether somebody’s moved, they would at least at minimum say, you know, oh, this individual looks like they no longer live in our state. So we’re gonna stop paying the managed care company every month for somebody who is not even here.
Joe Selvaggi:
All right. And of course that money being aid for the person who lives in here is money. That’s not going to schools and roads and police and all the other great things we want from government. So a costly mistake, so that that’s some good news. We were, we had to look around quite a bit, but we found some good news there in the build back, better plan. Let’s focus now on Massachusetts. We’ve we were, I guess, pioneers in the role healthcare reform. And we got quite a bit of money in the American rescue plan act. I think somewhere around $4 billion. We’re talking about that’s being debated up on the top of beacon hill. What can you say about how that might be spent on healthcare here in Massachusetts? What are the issues being debated here?
Josh Archambault:
Sure. So the, the kind of status of where this is, is there has been a $4 billion bill that’s made its way through the legislature. And there’s been a lot of disagreement between the governor about who gets to appropriate this money, or whether it’s the legislature. And the legislature said in 163 page bill we’re, we’re gonna tell you how to spend the, at least the first $4 billion. Now, now mind you additional money went to the states excuse me, to the cities and towns that they have to spend as well. But the state is also funneling some of this money down. And one of the interesting initial observations in some of the press coverage was there was quite a bit of earmarking in this bill that didn’t really seem to be connected to healthcare or COVID related relief, you know refurbishing you know, gazebos in certain towns money going towards Irish, social clubs road repaving, all, all those good sorts of Christmas tree earmarks that we typically see in some of these bills, but, but putting it aside in the grand scheme of things, the book, the bulk of this money, I think, is spent on areas that are public health related or healthcare related there’s millions of dollars spent for on local health boards, $200 million that they’re allocating to local health boards, some for data collection and other infrastructure.
Josh Archambault:
I think there’s really good questions to be had about how did our public health infrastructure work during COVID, what could they have done better? Where did they fail? I think there will be continued debate here on how should this money actually be spent. And are we in a much stronger position going forward? There’s 260 million that is being allocated to finance really strained hospitals. And so again, this has been a perennial issue in the legislature about who qualifies as a financially strained hospital, how well run are these hospitals. And I think Pioneer’s interest here is just around accountability and transparency of how this money will be ultimately spent to make sure that on the back end, after spending these billions of dollar, that we end up with a health system that is stronger and more efficiently run, and this isn’t just kind of being dumped into a black hole here, but there’s a number.
Josh Archambault:
I mean, we could literally spend 30 minutes going through all of the earmarks of money spent on behavioral health loan, re payments for counselors, which there’s certainly a need here. We hear almost to every day of examples in which emergency rooms are strained by behavioral health cases, in which there are not enough behavioral health beds going forward. So it puts hospitals in a tough spot when they’re trying to respond to COVID related issues when they have so many folks that are in crisis from a behavioral health standpoint going forward. So these are, are some of the overarching debates. It’s a lot of money being spent on community healthcare centers and the behavioral health world going forward. The real discussion to be had going going forward is just what sort of tracking and understanding what we have on how the money is actually being spent and whether it’s making a positive impact or just being spent for the sake of spending it.
Joe Selvaggi:
Well. Yeah, well, gosh, I would imagine one could be very sympathetic to the fact that COVID 19 was an extraordinary strain on the healthcare world. So financially stressed firms could either be financially stressed, cuz they’re poorly run or financially stressed because COVID imposed an extraordinary burden on, on that firm, how who’s in the business of around, which is which how, how do we know that we’re not merely subsidizing a, a a dysfunctional healthcare organization or whether they were in the front lines doing battle with COVID and this extraordinary event, once, once we’re past it, they can return to some sense of normalcy and that that money will have been well spent effectively keeping alive, affirm that endured an extraordinary strain.
Josh Archambault:
I think you’re asking exactly the right question, Joe. I’m not sure that there’s a great answers here in this bill or in the conversation on beacon hill. Unfortunately, the political are aligned here to not have some of those tough conversations. I mean, the other debate in this bill that has received some attention has been around payments for essential health workers and who qualifies for that. There’s been some disagreement about the governor’s definition of that versus what the legislature, the legislature tries to set up a commission, a massive commission. I think it’s over 30 people to determine who should qualify and how to get those payments out. And I think this is, this is where this governing gets really complicated, really fast. I think there’s general agreement that most people in the Massachusetts and other states were really appreciative of healthcare workers and others that were coming to work every single day during the most uncertain days of the pandemic and really putting themselves at, at risk.
Josh Archambault:
But once you start to get into conversations around teachers, social workers, foster parents, you know, garbage individuals working outside, I think it gets a little harder in a little trickier to find universal agreement on who gets these additional payments. So whether it’s a large institution being given money, just because they’re a healthcare institution or involved in healthcare, or whether it’s an individual person who the state is determining, they want to now give additional money. I, I think at minimum there needs to be a robust public discussion about this, not just inside the golden dome on beacon hill, but then ultimately I think there needs to be some transparency about, do we actually deliver this money? What, what is a result of this money, particularly for the institutions? Are they actually investing the money so that they’re better prepared for a pandemic long term? Or are they spending this money in a way to just backfill salaries for individuals or others in which there are underlying concerns about whether this is a going concern going forward from the business side.
Joe Selvaggi:
So getting close to the, our the end of our time together. So I always like to ask us particularly around direct policy questions. You mentioned the the governor and, and the legislature having a healthy, lively debate on who, whose prerogative it is to decide where this money is spent. If Josh Archambault were a king for a day or a, an all powerful governor. How would you want to see some of this money spent knowing that you are a healthcare policy expert and, and, and want to see the most value for the buck, the most efficient use of that money to ensure that the most people can be helped? What, what would you do?
Josh Archambault:
Well, I mean, this, this money from the federal government was allocated to try to help with pandemic preparedness. So for me, that would be the first and foremost, my focus, I, I, I think whether gazebos or helping the Wang and Schubert theater with money is probably not going to be near the top of my list. So I think that’s the first thing. And, and, and I think my criteria would be twofold. One is to make sure that we are understanding where there were gaps, where, where were there problems? Was it on the data side? Was it on the infrastructure side? Was it on the communication side? If we were to come into 20, 23 or 2025, what needs to be in place now that we don’t have to make sure that our ability to continue in some sense of normalcy when another pandemic comes, cuz inevitably there will be another one.
Josh Archambault:
How do we make sure that we have that flexibility and infrastructure in place to be able to, as a society and the state move forward? Some of that is related to human infrastructure. We don’t have a enough certain kinds of providers. And so I, I am sympathetic to looking at ways to increase the amount of providers that we need to be flexible. I, I would make sure that there’s a discussion about removing barriers that are in place. Some might have financial implications, some may not. And then finally, I probably wouldn’t spend all the money if we can’t find ways that actually meet towards goals. And so perhaps whether it’s returning the money, whether it’s giving property tax relief, I mean, for individuals that were struggling to get to work there, there is something here to be said that the, the help most helpful thing for them going forward would be some sort of reduction in the cost of their living instead of just spending the money on some of these pet projects going forward. So for me, that’s, I would make sure that we have some pretty strong criteria by which we’re trying to make these decisions looking at how do we best prepare and how do we actually help people that were impacted by the pandemic?
Joe Selvaggi:
Well, I’m gonna ask this, not knowing the answer, but this is, you know, healthcare and healthcare research is part of the policy. Part of the, in a, a pioneer, are you planning on doing any research in, in a sense preparing a plan that said this is what Massachusetts or the, the nation in general should be doing to prepare for the next pandemic if it’s a next year or a hundred years, hence is there any research where we analyze what we did right. And wrong and layout let’s say a, a a menu or a a recipe for moving forward in, in the future.
Josh Archambault:
Yeah. You know, it’s something that we have had conversations about and there’s a lot of our work that I think is very, very relevant to this conversation that, that the complex answer to this though, is that there’s both a federal and a state discussion to be had here. So at the state level, certainly the questions that need to be had are what are the barriers that were in place pre pandemic and maybe still are in place that would allow the state, the health system be a lot more flexible going forward. These are things that we’ve kind of touched on in some of our prior conversations, whether it is across state line telehealth, or making sure that all providers can use telehealth, whether it’s allowing certain providers to have the flexibility, to practice on their own for things that they’ve been trained to do something called scope of prep, instead of always having to be, have oversight or physical oversight, whether it’s the ability for health institutions to have flexibility, to move staff to different sites.
Josh Archambault:
There’s some barriers to that that had to be waived during the pandemic, whether it’s institutions having the flexibility to open more ICU beds without having to go through a massive credit process and application with the state to get permission to do so. There’s a lot of things that the state could do on the policy side moving forward. I, I certainly think pioneers done lots of work in the space around data reporting, whether it is in nursing homes or others, whether there’s certainly a lot of improvement to be made there to make sure that when we do have something pop up, not only is it being flagged for the relevant state authorities, but the public is able to be informed and that data is easily accessible. So people understand what’s what’s going on, where the high risks are, where the cases are coming from, instead of feeling like they’re ill-informed.
Josh Archambault:
And then for our podcast in the future, certainly a conversation to be had about what needs to happen at the CDC at the FDA and vaccine development. If that’s part of a pandemic response that there’s lots of opportunities there, I think for improvement and ways to tweak, even now, it doesn’t have to be for a future pandemic. So people better understand what’s going on, what the risks are. They can properly assess for themselves and their families going forward. And so we can avoid some of the issues that we had in the past, or the fact that governors or others had to wave a lot of these barriers that were in place.
Joe Selvaggi:
It’s interesting. Everything you prescribe, I think is Pioneer’s research going back 20 years many of the provisions you described as being, making us more ready for the next pandemic is just good advice for healthcare in general. So there really doesn’t seem to me by my reckoning and all shows we’ve done on healthcare, and COVID, much light between good healthcare reform and preparation for the next pandemic. They seem like almost identical prescriptions.
Josh Archambault:
I think there’s some truth to that. <Laugh>, I mean, we don’t need to make this overly complicated going forward. You know, when you’re sick, there’s a lot of complexities to that. And so we want to make sure that we have the most flexible dynamic, innovative system that we can have. And a lot of that is looking at incentives and removing barriers to be able to address that, whether it’s COVID-related or whether it’s other chronic condition related.
Joe Selvaggi:
That’s a wonderful place to end the show. We tied it all together with a nice bow at the end. So thank you very much for joining the show. Again, Josh you’re as always a very informed and clear guest and our listeners are grateful for it.
Josh Archambault:
Great. Thanks, Joe.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoyed today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcast, or podcatcher, it would make it easier for others to find Hubwonk if you offer a five-star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
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Jeff Farrah on Why We Need a Start-Up Visa
/in Economic Opportunity, Featured, JobMakers, News /by Editorial StaffThis week on JobMakers, host Denzil Mohammed talks with Jeff Farrah, General Counsel at the National Venture Capital Association, a D.C.-based group that advocates for public policy supportive of American entrepreneurship. They discuss why we should adopt reforms such as a “start-up visa,” allowing immigrant entrepreneurs to stay here in America so we can benefit from the potential job creation, innovation, and economic dynamism of newcomers who graduated from our universities, worked for American companies, or simply have a viable plan to start a business. Jeff knows that immigration and entrepreneurship go hand-in-hand, that immigrants are twice as likely to start a business, and that it’s not just big policy changes that could move the needle, as you’ll learn in this week’s JobMakers.
Guest:
Jeff Farrah serves as General Counsel at NVCA, where he advocates before Congress, the White House, and agencies for pro-entrepreneurship policies and leads in-house legal matters for the association, including management of the NVCA Model Legal Documents. He loves working at the intersection of venture, public policy, and the law. Jeff concurrently serves as Treasurer of VenturePAC, the political action committee of NVCA. Prior to joining NVCA, Jeff was Counsel to the U.S. Senate Committee on Commerce, Science, and Transportation where he advised Chairman John Thune (now Senate Majority Whip) and members of the committee on technology, telecommunications, and Internet policy. His committee perch gave him an invaluable perspective on how policymakers think about technology and its impact on American life. Previously, Jeff served as General Counsel to U.S. Senator Scott Brown, serving as Brown’s top legal and policy advisor on a variety of issues. During the 2012 presidential election, Jeff was a member of Governor Romney’s Trade Policy Advisory Committee. Prior to the Senate, Jeff was an attorney at a leading Washington, DC law firm for international trade matters. His trade law experience includes World Trade Organization Dispute Settlement and trade remedies cases before U.S. agencies. A native of southern California, Jeff earned his Bachelor of Arts degree in Political Science from the University of California, Santa Barbara (Go Gauchos!) and his Juris Doctor from Seattle University School of Law. Jeff was a Visiting Student at Georgetown University Law Center.
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Read a Transcript of This Episode
Please excuse typos.
Denzil Mohammed:
I’m Denzil Mohammed. And this is Jobmakers
Denzil Mohammed:
As we’ve established in this podcast, immigration and entrepreneurship go hand in hand, immigrants are twice as likely to start a business. So why then don’t we have a visa allowing immigrant entrepreneurs to stay here? For Jeff Farrah, general counsel at the National Venture Capital Association, a DC-based group that advocates for public policy that supports American entrepreneurship, a so-called start-up visa is a no-brainer for immigrants who went through our universities or worked for American companies, or simply have a viable business plan and want to start a business here. We should be rolling out the red carpet. Instead we reject them and actively deny ourselves job creation, innovation and economic dynamism. Jeff is advocating for a startup visa and other immigration reforms that would bring jobs to America. And he notes that it’s not just big policy changes that could move the needle. As you’ll learn in this week’s Jobmakers. Jeff Farrah, thank you for joining us on Jobmakers. How are you?
Jeff Farrah:
I’m doing well. Denzil. Thanks so much for having me. So
Denzil Mohammed:
Why is immigration such an important issue to the National Venture Capital Association? I see it’s one of your 10 issue areas. Where does it rank and why?
Jeff Farrah:
Well, you know, I kind of think back to a conversation I had with a board member of ours several years ago. And we were walking in, in DC, between meetings at an agency and on the way to Capitol Hill. And we were talking about a lot of the issues on NVCA’s list. And, you know, we said so many, the things you all do were so to us and important to the founders. But when you think about immigration, you’re really talking about the whole company because without these individuals coming to the United States, oftentimes to launch a high-growth startup, that there’s no company in the first place. And so it’s kind of a Genesis moment in some ways. And so I think that, you know, all you have to do is look at the storied history of immigrant entrepreneurs who have launched so many iconic US companies. And it becomes obvious why it is that we really need to make some serious changes in this country, if we’re going to remain the best place in the world to launch a high-growth company.
Denzil Mohammed:
So has it always been a focus of your association or have there been times where it’s taken precedent over others?
Jeff Farrah:
Well, certainly a lot of times with any trade association, we’re a little bit at the whims of what it is that Congress and federal policy makers are doing. And so certainly there are times when immigration is something that is a lot more on the list. And, you know, I’m reminded of course, of the time period during the Obama administration, where there were efforts to pass comprehensive immigration reform reform also happened during the Bush administration, of course, during the 2013 bill that I’m referring to, there was a start up visa that was included in that that NVCA had a lot to do with pushing. It’s certainly been a piece of NVCA’s advocacy work for many decades. And, and this is something where going back about 15 or 20 years, it was a group of venture capitalists that, that really recognized first that we didn’t have a tailor made way to be able to have foreign born entrepreneurs come into the country, that we were very much using these square peg round hole solutions, and that we needed to have a, a more elegant way to allow these individuals who want nothing more than to launch new American enterprises to be able to come to our country.
Jeff Farrah:
And so really ever since then, a startup visa has been something that has been at the forefront. And we’re of course, very interested in, in getting this across the finish line, but I’ve had a number of successes along the way.
Denzil Mohammed:
So this startup visa, you make it sound as though it’s almost inherently American this idea of enterprise and starting a business and creating opportunity. So I see several countries have some for some form of a startup visa. I mean, from Australia and Canada, all the way to Estonia and Lithuania the Netherlands, Singapore, Denmark where is the US on this issue?
Jeff Farrah:
Unfortunately we’re not by far enough along. And I, I think, you know the countries that you’ve mentioned, you know, both in immigration, but in other policy areas too, they they’ve seen all the benefits that, that high growth startups have created in the United States. And our playbook is, is obvious in terms of the things that we have done in this country to create that secret sauce. And so other countries are trying to replicate a lot of the policies that, that we have had historically in this country, but in, in one way, they’ve, they’ve innovated and, and kind of done things that we’ve not been able to do, which is in trying to attract the world’s best entrepreneur entrepreneurs to their shores. And so, despite the fact that we’ve seen this proliferation of other countries creating startup visas, we, we have not in the United States and it’s not cuz it’s a terribly controversial idea.
Jeff Farrah:
In fact, you know, in my time talking with a lot of lawmakers, you don’t really get any pushback on the substantive issue. If you ask people, should we make it easier for individuals who want to create new American companies and give American citizens jobs? Should we allow those people to do some easily? You will probably get 535 members of the house and the Senate to nod an approval. The tricky part though, is that immigration policy tends to be caught up in some other very, very controversial issues. And we’ve been in a, a bit of a dynamic here in the last several years where not much else can move on immigration reform unless the entire package moves. And so the politics tend to be very complicated and it does lead to this unfortunate situation where perhaps some of the low hanging fruit like a startup visa are, are not able to get across line.
Jeff Farrah:
And we’ve certainly tried to come up with, with perhaps creative ways of addressing that, but ultimately have not been able to, to get the, the bill passed. We have been very, very fortunate to have champions on this issue on a bipartisan basis, going back many years, the most recent version of this that viewers should should tell a look at is called the like act from Congresswoman Zoe Larine its the let immigrants kickstart employment act. And this is Ms. LG Green’s latest version of, of a bill. She had done previously to create a start at visa and she both creates a non-immigrant visa and then an immigrant visa that individuals can into. So if you first come on the non-immigrant visa or you come on an oh one, a visa, you can graduate into the immigrant visa on a pathway to citizenship. And then over in the Senate side, there is a, a larger bill called the startup act, which does a number of, of things in startup policy. And that’s from a group of Senator Mark Warner from Virginia, Jerry Moran from Kansas, Amy Klobuchar, Roy Blunt, really a great group of senators. And within that bill, there is also a startup visa. So that really shows that there is the capability of this really getting the attention of people from all different political stripes.
Denzil Mohammed:
I understand this idea of, of it being mired within something that’s so politicized and so contentious immigration. Whereas it’s, it’s such an integral part of who, of what America is. And I, I know of many stories of entrepreneurs or voting entrepreneurs who because of our immigration and were not allowed to stay here and start their companies an educational online resource called Sutori started by a group of three immigrants. It ended up being, you know, two of them had to go to other countries in order to, to continue the business. Only one was, was allowed to stay here. And you, you spoke earlier about, you know, it being such a part of our, of America, America’s secret sauce. So many iconic American brands, Levi’s jeans, Kraft, Coors bear, Budweiser up until Tesla and Google and eBay all founded by immigrants. Explain to me how the startup visa would work and you know, other initiatives that, that you’ll support like us, you know, the idea of stapling, a green card onto college diploma. Mm-Hmm
Jeff Farrah:
Sure, you know, I, I think that a great illustration of how the startup visa works is, is mentioning perhaps a, another famous foreign born entrepreneur. There’s a gentleman named Jyoti Bansal and Jyoti is from India, originally. He came to the United States on an H 1 B visa and he wanted to be an entrepreneur, but he was working under his H1B status. That was the, the authorization that he had to be in the country. And Jyoti has talked publicly about the fact he needed to wait seven years in order to get his green card. Well, of course he couldn’t launch his own company while he was working on an H1B visa. So he needed to have the green card to be able to go and, do that. And so you kind of think about somebody like him, who is unnecessarily waiting to do what they’re probably put on this earth to do, which is to launch a, a high growth company.
Jeff Farrah:
Well, Jyoti finally gets the green card. He launches a company called app dynamics and AppDynamics on the eve of its IPO ended up selling to Cisco for $3.7 billion. And you think about that situation. Well, obviously Jyoti has done a tremendous job of creating value. He’s got lots and lots of employees, a leading American technology company values it at almost $4 billion. And you think to yourself, well, it’s really a shame that we had to wait that additional seven years for that individual to go off on their entrepreneurial journey. And then the other issue that Jyoti has talked about is that he had friends of his during the same time period, that didn’t feel like they could wait all the time that was needed. And so they ended up leaving the country and going and launching new companies in other countries.
Jeff Farrah:
And that is unbelievably frustrating because the United States could have had those companies. We could have had that additional dynamism in the economy. We could have had that employment. We could have had that innovation, the intellectual property, so on and so forth. And I think that, you know, one thing that we’ve spent a lot of time talking with policymakers about is there’s this, there’s this recognition. I think in, in a lot of circles here that the venture has really become globalized in, in many ways, because as I said before, so many countries have copied our playbook and this is a perfectly reasonable thing for them to do, to try and create startup ecosystems in, in their own countries. If you look out over the last 20 years or so ago, the United States used to get about 86% of the global venture capital pie that would go into us startups that number’s been dropping over the course of the last couple decades.
Jeff Farrah:
And the last couple of years, we got about 51% of global of venture capital. Now the total number of course continues to go up. We continue to raise more venture capital here in the United States, which is a good thing, but it also shows that other countries are getting their act together. And they are able to welcome these individuals who are unfortunately not welcomed in the United States with, with something like a startup visa. And so that’s something we’re really trying to fix here because I think that ultimately the visa categories that we have now at our disposal, they’re not made for the entrepreneurial model. You think about an individual who goes to work at a large tech company on an H one B visa. That’s a, a different circumstance as somebody who wants to launch his or her own company, or you think of somebody on an oh one visa.
Jeff Farrah:
Sure. There are lots of entrepreneurs that end up getting, oh one visas. And, and that’s a, a great thing. And, and certainly a, a bit of a, a way to kind of capture some individuals. But when you’re trying to measure whether or not someone is extraordinary enough to get that, oh, one visa, that means they have to have a certain track record of accomplishment to point it to, to, to the direction of U S C I S, which ultimately is making those decisions that doesn’t work very well. If you’re 23, 24, 25 years old, and this is your first company, or maybe it’s your second company and your first one failed. And so are losing entrepreneurs who are not able to use the categories that we have now, which is why we need to create a category for these individuals who wanna launch these companies so that we don’t lose out on those opportunities going forward.
Denzil Mohammed:
And in their own way, certain states have actually stepped in to try to solve this in Massachusetts. For instance, there’s something of the global entrepreneur residence program, a way to bypass the quarters that would allow high skilled immigrants. Who’ve gone through our university system to be able to stay here and incubate their businesses. Thomas kero, the person I, I mentioned that was his only avenue in order to be able to stay here. How would these startup visas create this ripple effect of employment in the economy?
Jeff Farrah:
Well, I think that, you know, the, the, the economic literature on this is, is very, very clear, which is that the, the, the growth in our economy, the, the dynamism that I referenced before, it comes from young companies as they, they scale and grow. And, and you look at these companies that are five years old or less, and the are the key drivers of employment, where you have a lot of larger companies that are roughly hiring and firing in proportion on an annual basis. And that’s probably going to be the way it’s always going to be. But then a lot of the growth comes from these, these really special high growth young companies. And so we need to figure out a way how it is we get more entrepreneurship, how it is. We convince people that they need to leave their perfectly secure jobs at, at pick a company and jump out and, and do something extraordinary and audacious.
Jeff Farrah:
And so one component of doing that is to allow individuals from other countries who are very interested in following that model to come here, to ultimately do it. And, and so, you know, we, we, we know that foreign board entrepreneurs are, are among the most successful ones. Anecdotally, we also know that immigrants tend to be more entrepreneurial from a lot of the data that’s been published by, I think in the Harvard business review by professor Kerr. And so it’s certainly something that, that seems obvious to us. I, I think that one frustration that we have encountered with a lot of policy makers is this very wrong assumption. That just because the United States has been the, the best place to launch a high growth company in the last 50 years, but that’s necessarily going to be the case in the following 50 years. And that is absolutely not the case.
Jeff Farrah:
We, we cannot afford to rest on our laurels because as I said before, other countries are very, very serious about, about taking this mantle away from us. And we know that entrepreneurs are very influenced by public policy when there are signals that are sent to the market, that is something that, that people ultimately do derive lessons from. And in the case of immigration, if we’re sending up a giant stop sign at our borders to individuals who want to create new companies, those people are dogged individuals, and they will go and start that company in other countries. And there’s new capital available all over the world to do that.
Denzil Mohammed:
It’s so interesting that you talk about this globalization of, of venture capital and, and, and funding and our loss in the, in the rankings in the world. I mean, that’s from 80 something percent to 51%, that’s really astonishing and almost kinda shameful. Describe for me the, the international entrepreneur rule. What is that about?
Jeff Farrah:
Sure. So this is something that NVCA has led on for, for many years. And as I alluded to before, what, when there was comprehensive immigration reform, that was, that was going on in Congress. At one point, it became obvious that that wasn’t going to come to pass. And so what the Obama administration did was it, it asked itself what other tools are out there, where we might be able to, of the path for foreign born entrepreneurs to allow these individuals to create new American companies, but to do that without creating a new visa category. And so what the Obama administration determined is that they could use something called parole authority and parole is used in, in a lot of different contexts to allow individuals from other countries to remain in the United States. And so if you look at the, the statute that that gives the department of Homeland security and, and U S C I S this authority, it talks about the individual needs to provide a so-called significant public benefit to the United States.
Jeff Farrah:
And what the Obama administration did to their credit was they put that in economic context. And they said, when an individual is starting a new company, they are certainly providing a significant public benefit to the United States by way of employment and innovation and, and all the things that that we’ve mentioned before. And so they launched the international entrepreneur role in the final days to allow the department of Homeland security on a case by case basis to look at applications of would be immigrant entrepreneurs and determine whether or not they met a, a series of requirements. And so when president Trump was elected, we, we had a sense that this was going to be tough sledding, just given a lot of the immigration rhetoric that had, had gone on. And so we ended up approaching the Trump administration very early high and really make sure they understood that this was a way to create American jobs here in the country.
Jeff Farrah:
And, and very much should have aligned with, with president Trump’s vision for what he was talking about during that campaign. But unfortunately for us, they didn’t see it that way at all. They made a couple of attempts to repeal it. We ended up filing the first federal lawsuit in the history of BCA against the federal government to block them from, from doing that. We won in federal court, in, in Washington DC. And it was really because of that lawsuit that the international entrepreneur rule was around. Now, we’re in a situation where applicants are starting to apply for, for the international entrepreneur rule. And the final thing I’ll just mention on this is that it was, it was really fantastic that one of the first individuals who ended up getting the, the international entrepreneur real designation was backed by the then board chair of, of, of BCA. So it was a great kind of culmination that you had this individual who was working in the network security field, had a great idea, but was in a bad spot from an immigration perspective. He ended up applying for IER and, and getting it. And so that was very rewarding in to kind of see that happen because of our work, but
Denzil Mohammed:
Looking more broadly at the immigration policies of the last administration. It wasn’t simply a crackdown on unauthorized immigration. They significantly cut legal immigration to the us even the high scaled best and brightest that they claimed they wanted reflect a little bit it on, on what happened over those four years. And, and how, how do you see that as having benefited or hurt the United States?
Jeff Farrah:
Sure. I mean, I think you’ve hit the nail on the head in terms of the, the way it went about. And I think this is something where a lot of the messaging in public from former president Trump, a lot of the individuals in his administrative would talk about illegal immigration as being their focus. And that if individuals just would only go through the, the legal process, then that would be perfectly fine. It’s individuals that didn’t go through the legal process that they had a problem with. But of course that wasn’t what was going on in, in reality, because there was really a two-prong attack that was going on. It was, as they said, ed focused on individuals that perhaps were not going through the process, but simultaneously focused on a lot of individuals that had been waiting in line as folks would would say.
Jeff Farrah:
I think that during the Trump administration, you know, one of the things that, that we were involved with that was, you know, we don’t know, or we cannot quantify rather what types of individuals had a, a painful experience and gave up their, their desire to come to the United States, to either work at a high tech company or to go through a process, to try and become an entrepreneur. And so that’s something where those individuals probably are in other geographies now working on their companies and, and that’s real lost economic value that our country is not going to get back.
Denzil Mohammed:
So I took a look at the white house’s website to see what the Biden Harris administration’s top priorities are, and immigration is one of them. They call it outdated, they call it long broken system. What is the path forward?
Jeff Farrah:
Well, I think, you know, right now we’re in a situation where clearly the president is, is focused both on COVID, but also on the build back better agenda. And that’s dominating the headlines. And, and certainly something that I think Democrats are clearly highly motivated to get this over the finish line during, during this calendar year. And so I think that’s going to be the focus. It, it does not look at this time as if immigration policy is going to be able to be in the build back better act. And, and that really is because of the budget reconciliation tool that the Democrats are using here. And there are a variety of rules that apply to the types of things that can go into that bill. And so, in terms of, of looking forward, you know, this has been an issue that there are a lot of key constituencies, especially within the democratic party that have wanted to make progress in immigration reform for many, many, many years. And it’s been incredibly frustrating. And so I suspect that there will be a concerted effort to make progress on this. I think though that the, the issue will come ultimately what the makeup is of the house and the Senate. And that might be something that, that might frustrate a lot of these efforts going forward. And so I think that, you know, some people are projecting that Republicans are, are likely to take the house. Perhaps they will take the Senate that probably doesn’t, doesn’t lead to a, a positive outcome on immigration reform
Denzil Mohammed:
Is not even necessarily an immigration issue. I mean, it’s, it’s business generation, it’s it’s job creation and it’s inherently American. I think that’s, that’s where it fits into the narrative for me, as far as I see it, but it’s also human issue. It’s, it’s, it’s people who, you know, build up dreams and, and, and need a place where they can act to their ideas for the benefit of the host country. Right.
Jeff Farrah:
I completely agree. And you know, the thing too, is that there, there are these efforts right now going on on a so-called China bill, and it’s gone by a bunch of different names over time.
Denzil Mohammed:
I wish you the best of luck in your advocacy and in your work. And I hope more people do on your coalition to be able to get these things done. We need an immigration system that works for all of us, right?
Jeff Farrah:
We do. I appreciate you shining a light on this, and it’s been a pleasure to be part of the conversation.
Denzil Mohammed:
Jobmakers is a weekly podcast about immigrant entrepreneurship and contribution produced by Pioneer Institute, a think tank Boston and the immigrant learning center in Malden, Massachusetts, a not for profit that gives immigrants a voice. Thanks for joining us for today’s insightful conversation and how welcoming entrepreneurial talent benefits all of us. It’s a good way to end our first year. Jobmakers will take a break for the holidays and return on January 6th with a fascinating interview with the author of “Open: the Story of Human Progress,” on how borders are actually holding us back. Send your questions to Denzil that’s D E N Z I L at Job makerspodcast.org. I’m Denzil Mohammed. See you in 2022 for the next episode of Jobmakers.
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Institute for Justice’s Michael Bindas on the SCOTUS Oral Arguments
/in Civil Rights Education, Civil Rights Podcasts, Featured, Podcast, School Choice /by Editorial StaffThis week on “The Learning Curve,” co-hosts Gerard Robinson and Cara Candal talk with Michael Bindas, a senior attorney with the Institute for Justice, who represents the lead plaintiffs in the U.S. Supreme Court case, Carson v. Makin. They discussed last week’s oral arguments, and the background and key legal contours of the case. Bindas described Maine’s school tuitioning program, and the pivotal change in the early 1980s that allowed for the state to discriminate against religious families. They explored the questionable distinction that the U.S. Court of Appeals for the First Circuit drew between religious “status” and “use” in schooling, and the likely impact of the U.S. Supreme Court’s 2020 Espinoza decision, which was a major victory for the Institute for Justice and school choice. Bindas shared what makes him hopeful that the Court will rule in the Carsons’ favor, and what he thinks the next legal steps should be to support K-12 educational choice.
Read Pioneer’s amicus brief and op-ed in support of the plaintiffs in this case.
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https://www.denverpost.com/2021/12/09/colorado-parents-substitute-teacher-shortage/
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Read a Transcript of This Episode
Please excuse typos.
[00:00:00] Gerard Robinson [GR]: Hello listeners. This is Gerard Robinson from beautiful and starting to become very cold Charlottesville, Virginia, for another week of The Learning Curve, where we talk about great ideas, great stories, and have conversations with great people. But of course, none of this would be without the greatest co-host in the United States, Cara Candal.
[00:00:21] Cara: I’ll take it. What I won’t take though, Gerard, is people from Virginia talking about the cold.
[00:00:36] [GR]: I forgot that I’m speaking to someone in Massachusetts. Who’s got roots in Michigan. Yeah, I’ll take that. My kids were like, mom. And then I thought I’m going to consider that request. So, yeah, no, but glad to hear. It’s been a big week. We are ramping up to the holidays. We’ve got a great guest this week.
[00:00:55] I’m sure you were listening to the Carson case. as [00:01:00] I was on. Monday, was it only family? Tuesday? what day is it? Sure. So we’re going be talking to Michael Bendis later today. I know it fits me. It feels like it should be January one, but we’re going to be talking to Michael Bindas and that’s pretty exciting because he just argued in front of the Supreme court.
[00:01:16] So, , yeah, , we’re lucky to have him. And what do you, what are you up to in beautiful Charlottesville, Virginia? Well, the girls are getting ready for the last week of class. My wife is slowly but surely tying up the, last semester for a year in person. UVA law school. I am preparing to finish up work next week, working with teachers and principals on a pretty good project, talking about character education and all those things.
[00:01:44] And, slowly but surely watching and waiting to see who will be the first few appointees to the young administration here in Virginia. I think a lot of people are watching and waiting. And a lot of us in the, , ed reform space have a lot of [00:02:00] suggestions for your new governor, but I’m sure you do for sure.
[00:02:05] So, yeah. and what else is on your radar as we head into this, holiday season, which is a PA I don’t know, seems to be long to make this year, but that’s, maybe that’s just me with three children. Well on the family side, we’re going to hang out with the grandparents on Christmas day, and then we’re going to spend some time here with each other.
[00:02:23] And, , even though it’s still cold, , we’ll still get out and see family and friends and all those goodies. So it’ll be good time. What about you, saying, hosting, cooking, doing all of the things and I’m rapping, lots and lots of. So, yeah, but looking forward, one of the things I don’t know, Jared, I’m going to, I’ll just hit you with my story of the week, because my story of the week is about parents, which love to talk about parents.
[00:02:49] It’s fantastic. but with my own parents coming into town, , reading this story out of, I guess it’s gotta be the Denver post talking about [00:03:00] how, I mean this just nationwide shortage. Of teachers, right? For so many. How many years have we been saying there’s going to be a teacher shortage and now there really is one.
[00:03:10] And, not only can districts not find teachers they’re leaving in droves for various reasons. They can’t find substitute teachers, Gerard. So this is from the Denver post is, is entitled Colorado schools calling parents to help during substitute teacher shortage. Now, there is a connection here because, Who is in her mid seventies.
[00:03:29] She won’t mind me saying has quite a few friends in Michigan who have taken on substitute teaching. They’ve come out of retirement to fill some voids, in the Detroit area where she lives, same thing is happening here in Denver. And it’s like, they’re looking everywhere. You know, oftentimes districts.
[00:03:45] Substitute teacher pools, folks get into the substitute teaching pool and the hopes of getting a permanent position. And it sounds like many districts are just grasping at straws. Like I don’t mean to be rude, but are we at a point where it’s sort of like, if you have a [00:04:00] pulse, you can be a substitute teacher.
[00:04:02] and that’s of course not what districts want. So they are calling on parents, which I think. It’s an interesting approach, especially as parents are coming off of, , more than a year of having taught their children at home, they’re calling on parents to come in and help as they can. in school districts, Oh, the school districts, charter schools, faith-based schools, private schools are always calling on parents to help in various ways, whether it’s PTO or, , fundraising, whatever it is.
[00:04:28] But here it’s calling on parents to please come in and step in when teachers are sick or when we simply have a shortage, parents are saying. I can’t do it. I might still be taking care of one kid. Who’s not in school. Full-time I might still be taking care of family members or I’m trying to juggle work too.
[00:04:47] so it’s just this compounding problem as we come out of the pandemic and to make matters worse. Parents in Denver who are interested in helping are saying, do you know. It’s really too difficult to make this happen. They have to [00:05:00] jump through all of these hoops to become substitute teachers.
[00:05:03] They have to get special licensing and take, and it’s just a lot of them are saying it’s simply not worth it. If you want me to help, I’m here to help. Make it easier. So, , this is a challenge for districts because of course I joke and saying,, are we just finding somebody who’s breathing to come in and be a substitute teacher?
[00:05:21] And of course, substitute teachers are really important part of the fabric of schools, right. And under normal circumstances, Many schools have substitute teachers who are very well plugged in to what’s going on in a school. And that works well. but so you want to have standards and regulations, meaning that you’re getting quality people to take over, especially if you’re going to be a long-term substitute, but it sounds like in some cases, we have not built systems and structures to help people enter the substitute teaching market, in a way that’s efficient and going to be helpful to school districts, especially during this time of crisis.
[00:05:52] So I found it to be a really interesting story to learn, and maybe my mom will become a substitute teacher at some point, let’s [00:06:00] say, following the lead of all of her friends who are jumping into the pool, but do you think, I think it’s real because I’m hearing the same thing from. Friends of mine who are superintendents and also friends of mine who were in the classroom.
[00:06:14] Many of them said I’m already burnt out, just because of all the things dealing with COVID related dynamics. That’s number one. And then number two, when like Kyle, he doesn’t show up that I either have to take. Her or his class, or we’ve got to bring someone in, well, guess what, if we can’t find any someone now we have to double, which then brings in the challenge of trying to make sure students are distanced safely.
[00:06:38] So there are a lot of things going on, but I do think there’s something that we, as a choice and reform related community, have to take some ownership from while many of us have supported. 2030 some five years school reform, some of our language about accountability and standards while we didn’t mean it to become anti teacher [00:07:00] or anti teaching profession came off that way.
[00:07:03] And now we’re starting to see some of the unintended consequences of some of the seeds that fell on the type of soil we did not want, because when I talked to people about school choice, some people say, you know, I didn’t get involved in education. I was going to teach, but everything was either I’m going to go with charter school or private school, but guess what?
[00:07:22] You guys made the profession pretty bad. So that’s just something for us within the family to think about pretty bad is what you mean. Right. It made it sound really unattractive. Some of our conversation made it seem like teaching. If you don’t teach in a charter or a choice school, when you have to go to a traditional school, good luck, happy hunting.
[00:07:40] When frankly, some of our people don’t like what they call government schools. I think public schools are bad, but we, fed into that. , and I say, I’m oh, you and I aren’t one of the ones who did it intentionally, but that’s just one way to look at it. Number two, who wants to take the chance of going into a school and finding themselves.
[00:07:58] Also possibly [00:08:00] becoming ill even with the shop polling of the story. So I think there’s a deeper dynamic in terms of, and I think you hit on one of the points. We don’t have a strong pipeline when we were in Orlando your organization’s event. I ran into David. I can’t think of David’s last name, but he runs and has for years, a nonprofit organization, that’s focused on alternative certification for bringing teachers into the.
[00:08:25] And I’m sure we’ll find his name, , once we post this, but Dave has been saying this for almost a decade. He said you have to build a pipeline early. Think about this. Think about the number of military personnel who are coming back to places like Virginia, for example, large military state or other parts of the country.
[00:08:43] We have a troops to teacher program. It means that a, we have a template in place, but maybe there’s some things we need to. In order to bring in qualified military personnel to fill some of those gaps. Many of them entered military service for [00:09:00] public service. Education is part of public service and public good.
[00:09:03] So I think that’s one area we can tap into. You talked about our retired teachers, I’m all for and have actually seen. We have a number of retired teachers who are veterans, who would like to come in now wearing my former state hat. One thing states have to watch out for is teachers who are retired working X number of hours per month, and that possibly impacting their retirement benefits.
[00:09:29] And so there’s a nuance that our state chiefs of schools soups I’m sure will work out, but we can do. But just realize there is a point where you’re going to dip into that and teachers going to say no, but you also have former principals who would love to come back into the classroom and teach. So I’ve said a lot of things.
[00:09:49] I just think this is a tough situation. Human bodies enough. I think we have to have a conversation about teaching that makes it more humane, [00:10:00] not just about human being. Well, and I think, that’s right on Jordan. I think we rarely talk about substitute teaching as a pipeline. We rarely as community are really looking at, you know, you think about substitute teaching, it’s something separate, and I will just say one more thing.
[00:10:16] And that is to the point you made about some people still not feeling safe in schools. rates of COVID are different around the country and they’re going to be continued to be different, et cetera. But when you’re bringing folks out of retirement, To teach whether they were former principals or former teachers, or, that could very well be a much more vulnerable population.
[00:10:33] So I think too, that this speaks to, we’ve come off a year and a half of remote learning. This article says that some schools have to go back remote because they simply have a shortage of staff. Well, again, what are we learning from this pandemic about leveraging technology in times of. And so I, would’ve liked to read more about that in this article.
[00:10:54] And hopefully, maybe we’ll have David when we figured out his last name, we will have David on to talk to us about pipelines. [00:11:00] And I think that that’s a very worthy conversation. And speaking of technology listeners, you know, that we’ve interviewed Julie Young, who’s at Arizona state university. I would go to the Pioneer webpage for The Learning Curve, wherever you find us, and then type in Julie Young and listen to what she has to say.
[00:11:18] Cause she’s an expert. We’ve also had a couple of other people on our show. Who’ve talked about using technology because. Whether you like it or not for a whole host of reasons, moral, ethical, otherwise, technology can be your friend. And here is an example where we need a friend like this.
[00:11:36] So thanks for that story. So naturally New Jersey and Virginia will receive a lot of attention because the statewide election, but, we also had an election in New York city for a new mayor and mayor-elect Eric Adams. Former police officer, a member of local government. He’s now in a position where he can do some monumental things.
[00:11:59] And he said [00:12:00] that education to him was pretty important and he at least took one step toward making that a reality by making his first cabinet level appointment. And that is of a gentleman name, David. Who is the new chancellor of New York city schools. Some of you may know of David Banks because of his work with the Eagle Academy in New York City, which started off as a small network of schools, public traditional schools, innovative schools, although not charter, that were created
[00:12:31] in partnership with a Hundred Black Men in the early 2000s, then-Senator Hillary Clinton was at one of the announcements of the school. And so it’s now grown to a network where they have schools in the different burroughs. He started his career in different parts of public-private, but then became a school principal.
[00:12:50] And from a school principal, he worked his way up the system. When the mayor was actually running for office before he was elected, David Banks was one of the people he went to [00:13:00] for advice. So here’s someone who worked in the traditional system of New York city public schools, was a principal, has cache
[00:13:08] With principals and teachers, part of the union and who decided to create a, public school network that wasn’t a charter school because he said, Hey, I want to show that we can do innovative things within the structure of public schools. And I will say amen to that. And he said, now I’m going to step up and become the chancellor.
[00:13:26] Well, I have an opportunity to, I lived in New York for a couple of years in the mid 90s, in fact, when Rudy Crew was the chancellor of schools. I also know Joel Klein, many of you know, that New York City is the largest public school system in the United States, more than a million students, more than a hundred thousand employees.
[00:13:47] , it is a bureaucracy and it is a big place to manage. So many of our listeners will know that New York is a Mayor-0controlled school system, meaning the mayor will appoint the [00:14:00] chancellor that the school board. And that was a change that came about in part during a wave of changes in the eighties and the nineties, the big city school systems from New York.
[00:14:11] To Cleveland, to New York, but also in places like Jersey city and Newark. And so, Joel Klein would have been the first chancellor under the new system. So I wish David luck. I had a chance to meet him, and what I am optimistic about is he’s someone who worked through the system.
[00:14:33] So he’s got some credibility. Number two, he was willing to reform the system by being in the system; three, he’s got a pretty good track record for taking low-income young man, mostly Hispanic and African-American, and moving them off into college to jobs, entrepreneurship. So I wish him luck. I think this is a bold step for the mayor-elect.
[00:14:55] It’s a good signal, but as we know, he’s gonna have to work with stakeholders who kind of like things [00:15:00] the way they are, but there’s one thing he said. And most of what I’m talking about, you’ll find in the New York Times article that our team would put on the webpage – it’s this and I’ll paraphrase. He said if 75%
[00:15:13] of the white students in New York were not doing well in reading, the city would be on fire. But because it’s not 75% white – because it’s 75% black and brown – we kind of accept it as business as usual. What do you think?
Cara: Well, my first thought is to that very last. Are you listening, Boston Public Schools? Just saying this could be getting in trouble today.
[00:15:40] Right? This could be applied to so many of our urban districts, not just urban districts, so many of our districts, right. That we look, we know there’s nothing to see here. Everything’s going okay. And you look underneath the hood and you look at Boston, it’s the kids who attend the exam schools are doing just fine.
[00:15:59] Well, most of them are not children of color. And so I, think his point is very, very well taken. I too, am excited for this. I think that it’s a bold move. It says a lot about the new mayor’s priorities, man. Oh man. I mean, you’re talking about how large New York.
[00:16:18] It’s like that just the city school system that it’s so much bigger , than what any most school districts in America would even have to think about. So I hope that there are ways around what is no doubt, just a lumbering bureaucracy, and that the new chancellor can find a way.
[00:16:40] And I think, others in the position have made earnest attempts to make it happen. And you mentioned Joel Klein. I mean, I think that it’s remembering that mantra. city would be on fire if we were talking about white kids here is really, really important.
[00:16:55] And people who have long worked in a system that some probably [00:17:00] perceive as like a bit intractable, right. to get the work done, on behalf of kids. And especially at this particular moment, this inflection point in American history, it’s a big job ahead and cheers to the man who has agreed to take it on.
[00:17:15] So I like that story of the week, Gerard, and I think that, all eyes are on your home state right now watching the governor. And, in terms of school systems, we’re going to be looking at New York as well. So much to talk about in the months to come. Have you been Boston? Have you returned to the elected board selecting your superintendent or is it still mayoral appointed? Mayor appointed. Okay. And our producer, Jamie gas is going to text me right now and tell me if I’ve missed the news here, but yeah, no, I mean, talk about a system. That’s not, again, I say, how many times do I show, do I say this?
[00:17:50] This is for another show. But talk about a system that’s got some work to do. And, it’s not discussed here in the Commonwealth because we sort of, we have this tendency [00:18:00] in the Bay State to say like, oh, but we’re number one, and then look away from what’s really going on under the hood.
[00:18:05] Coming up, Gerard, we are going to be talking to Michael Bindas, which is really exciting because it was just last week that he argued the case, Carson v Makin. So we’re very grateful to Michael Bindas from IJ for taking the time out to chat with, we peons who have not argued in front of the Supreme Court.
[00:18:25] So really looking forward to talking to him, coming up.
[00:18:55] Well listeners, we have got with us today, Michael Bindas. He’s been here [00:19:00] before, and we’re super lucky to have him this week. , as many of you know, he is a senior attorney with the Institute for justice. IJ’s educational choice team, really exciting. Many of you probably listened to him just this past week.
[00:19:14] He’s the lead attorney in Carson v Makin, which is the latest school choice case before the Supreme Court. Michael was also part of IJ’s litigation team in Espinoza v. Montana Department of Revenue in which the US Supreme Court held that the exclusion of religious options from Montana’s educational choice program was unconstitutional.
[00:19:34] Prior to joining IJ in 2005, Michael spent three years as an attorney with Perkins Coie. He is a former law clerk to judge Risa Hawkins Barksdale of the U S Court of Appeals for the fifth circuit and served as an engineer officer in the United States army in Pennsylvania army national guard before.
[00:19:50] Legal career. He received his undergraduate degree from the United States military academy and his law degree from the university of Pennsylvania, Michael Bindas. Thank you for [00:20:00] being with us today and congrats on an excellent job last week. Well, thank you. It’s very kind of you to, say, but thanks for having me, Cara and Gerard. I appreciate the opportunity to talk about educational choice and about Carson v. Makin.
[00:20:15] Yeah, well, no. So we’re not fluffing your ego. You know, a lot of us, nerds were listening and, nerding out. And I have to say I had several texts, chains going with my colleagues. And although I hang out with a group that’s very biased toward school choice. We were like, yeah. This is great. This feels good.
[00:20:32] This feels right. So, it’s very exciting. I want to hear about the plaintiffs, from the case, of course, but just, we’ve got a couple of folks on before who have argued in front of the Supreme court, but like, can you just give me a couple of words, describe that feeling when you you’re, when you’re up arguing before the highest court.
[00:20:50] intimidating and nerve-wracking would, uh, I think the good descriptive, so this was my first time arguing before the court I’ve been involved in, several [00:21:00] cases that had been up there before, but, uh, I hadn’t had the chance to argue. And so, , it was, as you can imagine, very intimidating because you’ve got nine of the greatest legal minds in the country and, , Yeah, for me, just some short dude from New Jersey who has never argued before the court, to stand before them.
[00:21:20] it was humbling. It was intimidating. It was like I said, nerve wracking. but I, don’t think I, uh, you know, did anything too terrible or, or didn’t, hopefully make a clown on myself. You did not. I can attest to that as someone who listened all the way through, you, I have to know.
[00:21:37] And here’s one thing I was thinking I was going to kill me for asking questions off the books, but like, do you sleep the night before? You’re about to argue a case. Is that a thing that people are able to do? I w I thought I was going to have a hard time falling asleep. I got to tell you, , I hadn’t slept as well as I did the night before in quite some time.
[00:21:55] And I don’t know why that is . And I got a good night’s sleep. [00:22:00] I got a good workout in the morning of the argument. And, I don’t know why that is because that’s amazing.
[00:22:11] I love it. I know I wouldn’t sleep, but I’m also never going to be in that position. So Michael let’s refresh everybody’s memory here. So we have talked a lot about the Espinosa case. On this show, but we’ve talked a lot less about this case out of Maine. tell us a little bit about the lead plaintiffs.
[00:22:29] The Carson’s sure the Carson’s are a wonderful family who live in a town called Colin burn, main it’s, close to Bangor and Glen burn does not have a public high school. And in Maine, there are quite a few towns that don’t have public high schools. And if a town doesn’t have a public high school, Or it doesn’t contract with a school to educate, the students from that town.
[00:22:54] Then they have to provide tuition to the family. to in turn, attend the [00:23:00] school of their choice. It can be a public school in a neighboring school district. it can be a private school. It can be in state. It can be out of state. It can even be out of the country and state routinely pays for kids to attend.
[00:23:14] Some of the most kind of elite prep schools throughout the country, , all the kind of blue blood prep schools you hear about in new England, the state has paid for kids to attend some of those schools to attend schools as far away as Colorado, Michigan, California. But there is one type of school that a student can absolutely not select under this program.
[00:23:35] And that is any school that the state deems to be sectarian. And by sectarian, they mean any, any school that provides religious instruction, essentially. , so the Carson’s again, they live in Glenburn, which is one of these tuitioning towns. families from that town because the town doesn’t have a public high school or contract with the school, to educate the resident students, they were entitled [00:24:00] to tuition, assistance under this program.
[00:24:03] But they believed that Bangor Christian school was the best school for their daughter, Olivia. And because they decided to send Olivia to this so-called sectarian school, they could not get this tuition benefit that they were otherwise fully entitled to. , basically they had to make a choice, either choose the school they knew was best for their daughter, which was.
[00:24:29] Christian school or get the tuition benefit, but they couldn’t get both. And another family. another one of the plaintiffs in this case that we represent the Nelson family were in a similar position. They also live in a town, uh, Palermo that doesn’t have a public high school. So they were also entitled to the tuition benefit.
[00:24:49] they likewise desired a religious school for their children, and they knew that that was the best option for them. But they could not afford to go without the [00:25:00] tuition assistance benefit. So they were forced with the same choice that the Carson’s were. , but because they could not afford tuition on their own, they had to forego the school.
[00:25:11] They knew was best for their kids, , and their. constitutional right to select a religious school. And they opted instead to take the tuition assistance benefit again, because they couldn’t afford to go without it. And so, uh, that’s really what means policy? , this non-sectarian requirement the, in the program, does it forces parents , to choose between.
[00:25:34] A right, that they’re entitled to this tuition assistance benefit or their free exercise, right. To select the school, you know, the religious school that they believe is best for their children, but they can’t have both. And government simply doesn’t have any business putting families to that kind of choice.
[00:25:52] I want to go back for a minute because correct me if I’m wrong. So Maine’s school tuitioning program has been around for a [00:26:00] really long time. And when it was first established back in 1873, there was a faith faith-based option. There was a religious option wasn’t there. And then it was in the eighties that the legislature and the state attorney general said that we’re not going to do this anymore.
[00:26:14] Is that correct? And if so, can you talk about this part of. Yeah, it’s a great question and great point for more than a century, religious schools were allowed to participate in this program and students routinely, chose religious schools alongside their non-religious counterparts. And. Great because you had a fully diverse array of choices for students to select from, and for parents that think, you know, a religious education is right for the kids.
[00:26:45] they were empowered to choose that. But in 1980, in response to an inquiry from a state legislator, the main attorney general issued an opinion, claiming that it was unconstitutional under the [00:27:00] federal constitution to allow religious schools to participate in the program. If it wasn’t clear back then, that that was just an incorrect, legal conclusion.
[00:27:12] It certainly became clear that that was incorrect, in, you know, the year subsequent to 1980 as the Supreme court in a number of cases held that is perfectly fine for religious schools to participate alongside their non-religious counterparts in programs like this, that operate on private parental choice.
[00:27:33] But nevertheless, so, you know, you had a century plus of, parents being allowed to select religious schools under the program. Now, all of a sudden in 1980, , the state does a complete reverse course and the impact of that decision. was tremendous. , you have a great example of what happened in the wake of that decision.
[00:27:53] There was a school called John Baptist high school. It was a Catholic school that at the time in 1980, [00:28:00] educated more, , students receiving this tuition benefit than any other religious school in the state. And once the state announced this new policy, that religious schools would no longer be able to participate, John.
[00:28:13] The high school was forced with a choice. , it could either. Maintain its Catholic identity and no longer be able to educate these students, , who were receiving the tuition benefit and who couldn’t otherwise afford to remain in the school without that benefit, or it could shed its Catholic identity and continue to educate those students.
[00:28:37] And it had to make that decision and it shows the latter. It actually had to shut down and reopen as a non. Secular high school so that these students, wouldn’t be out of, the great education that they were receiving. And again, that’s the sort of choice that government has no business putting citizens or schools to.
[00:28:59] it [00:29:00] is perfectly permissible for religious options, , to be provided in these types of programs. And when Maine made that decision to take those options away, It quite literally forced, , at least one religious school to shutter its doors and reopen as something. It wasn’t a, as a secular school, just so that students would not be kind of put out on the street and, be out of this, great education that they had been receiving.
[00:29:28] Yeah. Well, it seems clear there that at least the school was trying to operate in the best interest of students, even though it had to make a great sacrifice. It’s listening to you speak to I’m reminded of what’s going on, right. In DC with the build back better bill where they’ve structured.
[00:29:41] Pre-kindergarten to be so that it will look like some faith-based preschools could be direct recipients of federal aid and face the same choice. So, no, this is a, different show, Michael, I digress, but, um, I’ve seen that keeps recurring. So now I wanna, ask you about when [00:30:00] the United States court of appeals for the first circuit, Jamie gas and I, we got to attended that hearing here in Boston, when they heard the case. So, and this is something, again, that school choice nerds will definitely want to hear about there’s this claim in the ruling that religious schools actually weren’t discriminated against in inmates, on tuition program, as long as they didn’t cause.
[00:30:22] Religious instruction, which one would think, okay, a, that’s a little bit of a head-scratcher because if you’re a religious school, that’s kind of what you do, but so they were making this distinction between religious studies. And use in schooling. So can you like break that down in a way that like my mom who has no interest in such issues could understand it?
[00:30:42] Well, I’m not, I’m not sure I can understand. Let me try when the first circuit issued its decision four months prior to the first circuit’s decision, the us Supreme court had handed down its decision. In a case you mentioned earlier, Espinoza versus Montana [00:31:00] department of revenue. And what was going on in that case was Montana passed a school choice program.
[00:31:06] the agency charged. administering that program issued a regulation, excluding religious schools from the program. And we challenged that exclusion. We went up to the Supreme court and the Supreme court held the dat exclusion of religious options. And the program was unconstitutional under the us constitution because government cannot single out in exclude schools from a program like that, simply because the schools are religious meaning simply because.
[00:31:36] Have a religious identity or status. And so it seemed in the light of that opinion, that the first circuit would come to a similar conclusion regarding Maine’s, religious exclusion. But what the first circuit did was say, Yeah. We know the Supreme Court just said a state can exclude schools because they are religious [00:32:00] because they have a religious status, but that’s not what Maine is doing here.
[00:32:04] Maine’s not excluding schools because they are related. It’s excluding schools because of the religious things that they do, like provide religious instruction, which, most religious schools do. and in the first circuits, view this distinction between. Excluding a school because it is religious as opposed to excluding a school because of the religious things.
[00:32:30] It does was a constitutionally meaningful distinction. and so basically what the, the first circuit said is we know a state cannot exclude schools simply because they are religious, but we think it’s perfectly fine for a state to exclude schools because they do religious stuff, like teach religion and.
[00:32:53] Essentially the issue that we asked the U S Supreme court to review is can, a state exclude [00:33:00] a school, simply because it does what religious schools do, which is providing. Religious instruction along with all of the other secular, instruction that they provide. and hopefully the Supreme court answers that question correctly.
[00:33:15] But again, I don’t know if that did a good job explaining this suppose the distinction between status and use, but that’s really what it is is can a state, we know a state can’t exclude schools because they are religious. Can it get away with discriminating against schools by claiming
[00:33:31] we’re only keeping them out because of the religious things that they do. Is that permissible discrimination or is that just as unconstitutional as the discrimination that was going on in Espinoza?
[00:33:42] So let’s stick with another state with, an M and the names is Montana.
[00:33:47] So in 2020, the Supreme court ruled in favor of plaintiffs. in the Espinosa case, we had a chance to speak with you and Kendra as well. That was a major victory for [00:34:00] choice and IGA really drove that. Talk to us about the Espinoza decision and its likely impact on the Carson case.
[00:34:10] Yeah. So, as I mentioned, Espinoza kind of resolved this question of whether a state can exclude schools simply because they are religious. I guess technically left open the question of whether a state can do what Maine is doing, which is saying, Hey, we’re not excluding schools because they are religious, but because of the religious things that they do, but critically, there were two things that the court said in Espinosa that I do think.
[00:34:39] Signal what the court is likely to do in Carson. The first thing is , in the opinion for the court, chief justice Roberts noted the fact that some of his colleagues on the court had questioned whether there is a meaningful distinction between discrimination based on religious. And discrimination based on religious [00:35:00] status.
[00:35:00] and he was alluding specifically to justice Gorsuch and justice Thomas who had in, uh, in a couple of concurring opinions, questioned whether there is any distinction at all, or whether this is really just kind of two sides of the same coin. what the chief said in his opinion and Espinosa is we acknowledge the point, meaning we acknowledge this criticism that some of our colleagues that made, but we don’t need to address it in this case.
[00:35:27] So he’s at least recognizing in that language from Espinoza. That, Hey, there’s no distinction to be made here. Maybe, this truly is just a matter of, how you describe what’s going on because as, as Justice Gorsuch famously put it, you can ask, is the state discriminating against Lutherans or is it discriminating against people who do Lutheran stuff?
[00:35:49] it’s the same discrimination either way. And we shouldn’t pretend, that it’s not. And so again, that’s the kind of. Thing and Aspen, I think that kind of perhaps [00:36:00] signals what we might see in Carson is, that the court recognized in the majority opinion that some of the members of the court , have really questioned whether there is any meaningful distinction to be made between religious status and religious use.
[00:36:14] The other thing that the chief did was after holding. Montana’s religious status discrimination had to be subjected to what we call strict scrutiny, which is the most searching form of judicial review of a state law where the law is almost always going to be held unconstitutional unless the government can come up with an extremely compelling interest to justify the law.
[00:36:41] After saying that Montana’s exclusion, which turned on religious status was subject to this strictest level of scrutiny, chief justice Roberts for the court wrote. Nothing we’re saying is meant to suggest that some lesser degree of scrutiny would apply to a law that [00:37:00] discriminated based on religious use.
[00:37:02] again, he didn’t hold that this strict scrutiny, this test, this, most searching level of scrutiny would apply to a religious use based exclusion, but he said nothing in our opinion should be read to suggest that some lesser level of scrutiny would apply. So again, here, he’s saying. . Or at least seems to be saying that the court is going to look just as strongly and justice searchingly at a supposedly US-based exclusion as the court did a status based disclusion and Espinosa.
[00:37:35] And if that’s the case, if the court does apply that same, very stringent level of scrutiny, I don’t see how Maine’s exclusion can survive here. So, you know, it’s a long way of saying. Espinosa doesn’t squarely address the issue here, but there are a couple of things that the court dropped in the opinion that seemed to suggest that the court would view what Maine is doing is just as problematic as [00:38:00] what , Montana was doing in Espanola.
[00:38:02] I’m married to a law professor, someone who actually practice law prior to going into the academy and lawyers do a really good job of going through the detail and analysis of words, which is really important. So for our listeners who aren’t lawyers, I may not follow policy, a great deal. One question, I it from them.
[00:38:22] And in fact, they were pretty excited about talking to you. They said, well, assume that the. Rules and favor of Carson. What will this mean for school choice and religious Liberty from your point? Well, there’s the immediate impact I think, of a good ruling. And then there’s kind of the broader national impact.
[00:38:44] know, of course the immediate impact is going to be in Maine. Parents will finally be able to choose religious schools for their kids. if they believe that’s the best fit for their kid, they’ve been denied that choice for over four decades under this program and they will get that choice [00:39:00] back. So that’s kind of the immediate impact.
[00:39:03] In terms of the kind of broader national significance of a ruling in our favor. I think the most important aspect of that would be this, it would remove one of the key arguments that school choice opponents have relied on in attacking school choice programs for decades. , every time. Uh, state legislature considers adopting a new school choice program.
[00:39:31] We’re expanding an existing school choice program, opponents of school choice, run to the state house and say, you can’t do that. You can’t have a school choice program in this state. Our state doesn’t allow public money to flow to religious schools. Our state constitution, as a Blaine amendment that prohibits any public funding of religious schools and they’ve argued.
[00:39:56] The legislature has to, reject the bill they’re considering, [00:40:00] or at least exclude religious options from any program. If they’re not successful, they’re in defeating the program and the program becomes law. Then they run to the courthouse and they say the same thing. They file a lawsuit, challenging the program, saying you cannot have religious options in these programs.
[00:40:18] They have to be excluded court, shut down this program or. Expel the religious options , from the program. If the court rules correctly in Carson, that argument will be gone. , opponents of school choice will no longer be able to say our state constitution, our Blaine amendment, whatever, state constitutional provision that might be, they will no longer be able to say our constitution.
[00:40:43] Prohibits the inclusion of religious options and these types of programs, because it will be clear as a matter of federal constitutional law that a state cannot exclude religious options from a program like this. And that’s really where the kind of bigger national [00:41:00] implication of a ruling in our favor will be.
[00:41:02] It will remove this argument once. And for all that school choice, opponents continue to make an attacking programs either in the state house or in the courthouse. And legislators will finally be able to rest secure in the notion that they can pass these programs, that these programs will be legally sound.
[00:41:23] And that the inclusion of religious options is not only permissible but required. If you’re going to provide non-religious private options. So I’m in the Commonwealth. We have a new governor LEC. Yuncken new Lieutenant governor AIG as well. They’ve talked about the importance of parental choice, Virginia compared to let’s say a Florida or an Arizona, not in the same league in terms of parental choice, particularly in the private sector, had a lot to do with our constitution.
[00:41:54] So am I. Reading this or reading Intuit that if we get a favorable [00:42:00] win in Carson states, like Virginia will have an opportunity to open up their doors in new ways. And even states like Florida and Arizona, which are very mature and the choice market, they too will be able to take it to the next.
[00:42:15] Absolutely because for so long, in so many states, legislators have heard from school choice opponents, you can’t do it here. You can’t do it. In this state. We have a Blaine amendment. We have state law that prohibits funding of religious schools, et cetera, et cetera, that argument will finally be put to rest.
[00:42:34] If the court rules correctly and legislators will now be able to confidently. Adopt these programs grow these programs and know that whatever provision of state law, whether it’s a Blaine amendment or some other similar provision, that those 10 not be wielded as weapons to take, to attack these programs or to take the educational opportunity that they [00:43:00] provide the students away from those stations.
[00:43:02] . That would be a, let’s just say a nice holiday present or new year’s present to a lot of families. In Virginia, as well as the rest of the country. Well, , I don’t have any other questions, but just want to thank you.
[00:43:14] And IJ, I believe this is your 30th year and work in terms of IJ and people. When they look a hundred years from now and try to identify, how did we come to a point where we actually accepted. parental choice programs in the public and private sector as being just part of our natural quilt of opportunity.
[00:43:35] They’re going to look back and see your work. the work of IJ, the work of his founders, its supporters, and others are saying they were the ones willing to take on the fight in courts when other people did not, or did not believe they can make it work. So thank you for all you do. Thank you.
[00:43:53] And listeners, this has been, , the learning curve with Michael , Michael take care. And [00:44:00] we will, I’m sure be calling you, , when we get the verdict sometime in 2020. And my tweet of the week comes from a, former guests, Citizen Stewart. And what Chris said on December 10th is quote. Charter school teachers are more diverse than traditional public school teachers. That in fact is a fact, the teaching, core is more diverse than the traditional public school systems.
[00:44:29] I would say the same is true for the principal core. So Chris, thank you for the. Yeah, he’s always really good at like, I like reading Chris’s tweets first thing in the morning to remind him, so what we should be talking about and why we do the work. So excellent stuff. All right, Gerard, do you know that this is our last show together of 2020. we’re going to take a little hiatus. I know that you are going to eat very healthily and you are right on track with that healthy diet, but [00:45:00] I’m looking forward to lots of Christmas cookies.
[00:45:02] It’s also girl scout cookie season, which is kind of tragic. I mean, such timing. I’m wishing you and yours, such a wonderful holiday season, , your card is beautiful by the way, your holiday card mine’s in the mail. I can’t say as nice as yours. Yes. It’s really, really courageous photo of your family, but wishing our listeners and wishing you such, , happy holidays, , Merry Christmas.
[00:45:24] If you celebrate it, Hanukkah is already passed and just a wonderful new year. And I think that I have to say I, for one Gerard I’m feeling quite optimistic. About 2022 on so many levels. I think Michael has just given us reason to be optimistic. I think we’re coming out of, what’s been a tough couple of years for all of us, and we’re getting used to this new life as normal.
[00:45:45] And I’m just so grateful to you, my friend, for being able to have this conversation every week. despite the few weeks we take a vacation and to our listeners for continuing to tune in, because if they didn’t do that, [00:46:00] we would just be talking to what we’re talking to each other, but I don’t know, talking to no one.
[00:46:06] So have a wonderful one, Gerard, same to you. And, , my new year’s wish for all of you is that we are healthier, safer, and more content to each other. And Gerard, we are starting off the new year with a bang because we are going to be speaking to the incomparable, Barry Weiss.
[00:46:24] I’m really, really excited about it. And what a great way to kick off 2022 until then. Stay healthy. Wish you great happiness and a wonderful ringing in of the new year. Cheers. Cheers.
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Building Healthcare Bigger: New Bill Is Good Medicine or Ill-Designed Cost Shift
/in Featured, Healthcare, Podcast Hubwonk /by Editorial StaffThis week on Hubwonk, host Joe Selvaggi talks with Josh Archambault, Pioneer Institute’s Senior Fellow in Healthcare, about the healthcare provisions in the pending Build Back Better Act and their likely impact on the coverage and cost to Americans in the wake of Covid-19.
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Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Framed as a response to the massive disruption created by the COVID 19 pandemic, the US House of Represents recently signed and forwarded to the Senate. The so-called Build Back Better Act. The healthcare provisions in the bill seek to make healthcare more affordable by preserving American Rescue Plan insurance and expanding eligibility and benefits for Medicaid and affordable care act plans. The question for policy analysts is to determine whether the act’s changes target those most in need in the wake of the pandemic, or whether the act’s provisions simply shift costs from the private to the public sector, potentially accelerating the total cost of healthcare in America. I guess today is Josh Archambault, Senior Fellow for Healthcare Policy at Pioneer Institute. Mr. Archambault has written extensively about the federal and state policy response to the pandemic and has analyzed the healthcare provisions in the Build Back Better Act. Josh will share with us his views on the likely impact of this pending legislation and offer insight on how policy makers could design alternative legislation to better serve the needs of healthcare consumers. When I return, I’ll be joined by Pioneer Institute’s Josh Archambault.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now joined by Pioneer Institute’s Senior Fellow on Healthcare Policy, Josh Archambault. Welcome back to Hubwonk, Josh.
Josh Archambault:
It’s really my pleasure to be back, Joe. Thanks.
Joe Selvaggi:
Well, it’s good to have you. We’re gonna talk about some very, very big bills today. We’re gonna talk about what’s recently passed in the house to build the, a back better act. And what has recently passed before that the ARPA American rescue plan act both big, big bills. I think the price tag on Build Back Better is roughly $2 trillion. And a good portion of that has to do with healthcare, which is your expertise. Now let’s start at a very high level when we’re talking aboutBuild Back Better with regard to healthcare – what is the aspiration of this bill? What are we trying to do as it affects healthcare in America?
Josh Archambault:
Great question, Joe. And I think you might get a hundred different answers if you ask members of Congress what they’re trying to. These bills are just so large with so many different provisions. I think the ones that probably are biggest are largely around expanding coverage, kind of quote unquote, building on the ACA or Obamacare. And some of those major provisions in particular make the ACA subsidies available to a lot more Americans up to a much higher income level than were previously available, both in Massachusetts and nationally. So going forward, we’re gonna have a situation where there are employers who are looking at this and saying, should I continue to even offer insurance because many more of their employees now can access these taxpayer funded subsidies. So that’s, that’s a big piece of it. The other one is Democrats efforts in particular, to try to get some sort of coverage option for folks that live in states that have not expanded Medicaid.
Josh Archambault:
And so they open a pathway for those individuals to access the ACA subsidies for the first time as well. And that’s gonna be quite costly versus if you were to extend a coverage to those individuals on Medicaid, which tend to have a much more stricter and lower prices and reimbursements for care, that’s provided, we’re gonna have a very, a large bill as a result of this. In fact, the congressional budget office, when it weighed in said that they expect to have this bill spend about $19,000 per new life, who’s gaining coverage going forward. And unfortunately about 75% of those people already have some sort of coverage. So there’s a lot of shifting around just like there was under the ACA of where people are getting coverage in a very cost costly manner to do so. And so this obviously raises questions about sustainability going forward. Cuz the last piece I would kind of highlight here is what they did to make the bill not look quite as costly is they only made some of these expand temporary only a few years out. And so we’re gonna have the joy of watching if this ends up passing the Senate in some form, similar to what passed the house, we’re gonna be watching this debate play itself out right around election cycles in the near future. Sure.
Joe Selvaggi:
I’ve, I’ve heard many accounts when people try to nail down how much this massive bill will cost. I’ve heard anything as low as 2 trillion. That sounds like a big number, but that’s the low end all the way to 5 trillion. If we were to extend all these subsidies out for 10 years. So let’s, let’s go deeper when we talk about subsidies and trying to get more people on, let’s say Obamacare or the affordable care act. How do we do this? Do we, in a sense write people a check so that they can mail it to the insurance company or what’s the dynamic do we, or do we move them onto like a Medicaid type program where it’s entirely subsidized and, and in a sense waive restrictions, how does the government actually make healthcare more affordable on the ground?
Josh Archambault:
Sure. So the, the way that this is handled is through one small little tweak, if you will, in, in the actual rules and regulations. And so in essence, what the, the house bill did is it said that under the ACA if you have to spend more than 9.5% of your income towards health insurance, towards the cost of health insurance then you could actually access the subsidies. So it’s actually income based. So up to a certain income level, 400% of the federal poverty level. But then, and if you had to spend more than 9.5%, you could also access them. Well, what this bill does is it actually lowers it to 8.5%. So it lowers that threshold. This is the kind of boring details of how who actually qualifies or not. So, so what then actually happens if you fall into one of those buckets, if you’re in one of these states where they’re allowing you to maybe the first time in this income gap previously where you didn’t qualify, well, you go to the ACA you look at and shop the plans and then you pick a plan and then the insurance company will receive a check from the government to cover a certain percentage of, of the cost of the plan.
Josh Archambault:
And as you have a higher income level, it cover covers a little bit less. In essence, though, what ends up happening here is that it the well, the patient or the enrollee is protected from having ever increasing amount of out-of-pocket costs. The insurance company just gets a bigger and bigger check if the goes up. And so there are some serious problems here with sustainability and the cost per life, to be able to cover these individuals and in the house bill, they wanna make it as quote unquote, as affordable as possible. So the out of pocket responsibility, the cost sharing requirements to get all of the technical terms in there for the patients are very, very low. In essence, what that means is larger and larger amounts of taxpayer money is going directly to the insurance company to help pay for and make hold harmless if you will, the individual enrollee, but at the cost to the taxpayers.
Joe Selvaggi:
So I just wanna restate what you said in layman’s terms. So I let’s say I I make a hundred thousand dollars a year and whereas the old test would’ve been eligible for ACA subsidies at it was nine and a half percent. So if they cost more than it cost healthcare costs more than $9,500 to me the subsidies kicking. Now we’ve moved it to eight or eight and a half percent. So it’s 8,000 or $8,500. Then they kick in earlier. But what you’re saying is that portion of my income goes to my insurance company. What goes beyond that? The subsidy itself that’s not constrained. The insurance company says you’ve got a $20,000 premium or a $10,000 premium. There’s no constraint on that. So the government either writes that firm, that insurance firm, a $1,500 check, if it’s a $10,000 premium or a $12,000 check, if it’s a $20,000 premium, do I have that right? Is that the dynamic? So you,
Josh Archambault:
You’re very, very close. Really the percent of your income is actually just whether you qualify or not. Once you then enter the ACA exchange, how much subsidy you get is based on your income. It’s not quite as analogous as you just kind of made connected the dots. So you may actually get more subsidy as a result than you would have paid. This is actually for Massachusetts listeners. This is actually an interesting historical comparison because under RO so-called Romney care in Massachusetts, this whole discussion was very black and white. If you were offered employer based insurance, you could not qualify for a subsidy end of story. And there a rationale behind that was, is they did not want to impact whether employers small employers in particular offered insurance. They wanted to reserve the subsidies to be spent for those that were uninsured or simply were having to buy insurance on their own and could not afford it.
Josh Archambault:
They wanted employers to keep their commitment, to continue to offer insurance. The federal law took a different approach, which we have just kind of talked through different approach that they’ve taken, which is a little bit more complicated to run the math. But the end result is a lot more people, especially under what passed the house, bill a lot more people qualify. And it puts tremendous pressure on those small companies who if you go to any chamber of commerce breakfast or anything else constantly say healthcare costs by far one of my biggest expense. And it is something that they wish would in theory, just kind of go away or have a little bit more certainty for what it used to be 30 years ago or 20 years ago. And so what I think is concerning about potentially what happens if this becomes law long term, is that you have a whole lot of employers who not only have uncertainty about what the federal government’s role is going to be and who qualifies because of the timelines, the temporary timelines that they put into this and business wants certainty.
Josh Archambault:
That’s how they plan and move forward. But second UFS now set up the situation where you have a lot more taxpayer funded money going towards a higher income group of individuals who didn’t qualify for these subsidies long term. And there could be some unintended consequences for the lower income communities or others in which they’re accessing coverage. I is a problem. And the final thing that I would say here, Joe, and wrote a piece about this for Forbes is that there are some concerns that this expansion actually is worse for people with preexisting conditions. Let me explain that for one second, for individuals who have a preexisting condition who are employer based insurance in general, they not only have more robust coverage, but they have lower out-of-pocket costs when we looked at and compared the plans that were on the ACA versus the plans that are typically offered by small employers.
Josh Archambault:
We that for people with preexisting conditions who will, again, the incentives are aligned for them to be pushed into the exchange and off their employer, based insurance for them, they will have fewer options of providers to go see. So their current providers may not be available to them. And second, they will probably pay a lot more money out of pocket under the ACA plans than they would under their employer plans. So there’s some real unintended consequences. I’m not sure Congress has fully internalized as they expand up the subsidy ladder into the increasingly into the middle class.
Joe Selvaggi:
So forgive me, Josh, I’m a little bit confused because again, I used to be an employer and we offered plans for our employees. We were very happy effectively to subsidize individual employees and engendered a sense of loyalty and professionalism. So is, is employer based insurance something we’re trying to encourage or discourage or whether we’re intending to do it, will this have the effect of having more employers provide it or just walk away and say, look because of the uncertainty and because I can’t compete with the federal subsidies I’m gonna get out of the business of ensuring or helping to ensure my employees.
Josh Archambault:
Yeah. These are very good questions, Joe. So there’s probably two conversations to be had on this one. The first one is your first point about is employer based insurance. The model that we actually want going forward. And I’ll just say there are pros and cons to the system. I think that there have been real challenges with the dysfunction that we see in our healthcare market that are slightly, that are driven by, in part, by the way that we have set up the tax benefit nature of employer based insurance. In essence, just to put in a sentence, but the problem is, is that the patient is disconnected from the cost because really the person who is the plan is the HR department or the CEO of the company. So the insurance, company’s not really interested in being patient centered, it’s really interested in what the CEO or the HR department is gonna offer their employees that has led to some big unintended consequences, unfortunately, that has led to some of the dysfunction, but that’s one conversation.
Josh Archambault:
The second conversation relates to this bill in particular, and it says, okay, well, let’s say that first, the sake of argument, we wanna move away from employer based insurance, which is not even the stated goal of what this bill is, but let’s say that is something they intend to do. Is this the best way to accomplish it? And I think the concern is that not only will this lead to a massive erosion for a lot of small businesses to just drop it because they can’t compete with the subsidy, the very generous subsidy that there’s the taxpayer concern long term, as we continue to subsidize write these large checks to insurance companies every single year for the subsidy amount, but is there a better way if we were to transition away from employer based insurance, which I think those right and left economists on the right and left would say there would be some benefit.
Josh Archambault:
I think there would be universal agreement that this is probably not the way to do it because of the blank check nature that the subsidy structure and it’s set up to the insurance companies. I think you would like to see reforms that at least cap the subsidy amount based on your income, just to say, Hey, if you make 150 FPL, this is how much you’re gonna get. If you make 200%, this is how much you’re gonna get. And you know, what the insurance companies would do. They would design plans that meet that subsidy loan instead, right now it’s whatever the Delta is for the subsidy amount, they just keep getting paid more and more. And I think ultimately that’s unsustainable going forward and it’s, it could potentially hurt the patients. And I think tax payers generally speaking, will pull money away from other public priorities, whether it’s infrastructure national, the fence, or anything else, those become a lot harder to pay for when so much of our economy is just being sunk into subsidizing health coverage.
Joe Selvaggi:
I was intrigued by your Forbes article, which did actually say, you know, these are some of the unintended consequences, either some of the victims of the new system. You, you mentioned some earlier us with preexisting conditions are, are far better off in their employer system than, than into an ACA plan. Were you to have the ear of your I guess where this is headed is to the Senate maybe a healthcare committee or a reconciliation committee. What would you rather this be written as what would, what would, in a sense fix the problems that you find the Forbes article?
Josh Archambault:
Yeah, I mean, I think I would have some really candid conversations on whether we want to continue to extend the subsidies up to this middle income class to begin with period because of these unintended consequences. But if they were committed to keeping that upward pressure and expansion of that, then I would first and foremost advocate that they should at least CA the subsidy levels. As I just mentioned, that would at least bring some common sense and rationality to this, that people would then be focused about how do we offer the best product to individuals with a subsidy that meets the budget that has been allocated for this right now, it’s a blank check. And I think unfortunately when you have a blank check and you’re subsidizing something, you get more of things you don’t always want. And so, as a result, we’re seeing higher and higher premiums, larger and larger amounts of money going to health insurance companies.
Josh Archambault:
And we’re not seeing if you’re spending more money, we’d wanna at least see an increase in the quality of care or the efficiency of how the care has developed. I don’t think we’ve seen that since the ACA has passed or even in the last 30 years. So we look across the healthcare system, as we’ve seen premiums go up a hundred percent, 200% in a lot of markets. We haven’t seen that what we see in technology in other industries, an adjustment in efficiency, or increase in quality. And I think that’s ultimately the problem here and why this becomes unsustainable long term is that we’re not seeing that, you know, think about your iPhone. You, you spend a lot more on a smartphone or an iPhone than we did 10 years ago, five years ago. But I think most people would say, yeah, we get a lot more value there.
Josh Archambault:
It’s a computer in your hand, in your pocket. It’s quite amazing what you get for paying a little bit more. Unfortunately, we don’t get a lot of that in healthcare. As a result, we, we see the prices varying significantly for the exact same services. We see them using the same machine that they used 10 years ago, but it’s now charging 10 times more for the same machine. There hasn’t been an increase in technology. So while our healthcare system does have some really innovative areas, I think there’s probably you universal agreement based on personal experience for many of us, but also just looking across at the aggregate there’s significant room for improvement. We don’t want to just keep subsidizing whether it’s just the insurance card or the kinds of care that aren’t delivering more value.
Joe Selvaggi:
So I want to have time to focus what we’re doing here in Massachusetts on, on healthcare. But before we leave the Build Back Better question. I wan to ask, is there anything in the bill? I mean, we’ve talked about subsidies and closing gaps and maybe some of the unintended consequences. Is there anything in there that actually is reform oriented that will, in a sense bring market forces to bear on healthcare, such that we’re getting more value for our, our dollar, or are we simply just throwing more money at a dysfunctional and very expensive system with the hope that consumers will be happy that their insurance bill is smaller.
Josh Archambault:
Yeah. I unfortunately I don’t look at this bill and see a lot of silver linings. I think there’s a couple that I would just highlight. There is some provisions in there for reinsurance programs. And again, these are one of those kind of complicated mechanisms to try to make the cost of insurance more affordable. It doesn’t unfortunately drive down the cost of insurance, but at least helps make sure that individuals are protected from some of the spikes. In essence, reinsurance is you’re able to put my money in and kind of reduce the cost of insurance going forward. So those are roughly 10 billion in the bill to start down that process for states to look at reinsurance programs and a number of states that have started down this route. They have had some success, you know, premiums going down 10, 20%, depending on what the dynamics of what’s going in the market.
Josh Archambault:
In essence, why you wanted do this is for those that are uninsured, that may be younger and cost is a big expense for them. If you’re able to have the premiums be a little bit less, some of them will come off the sideline and your risk profile goes down. You’re a little bit healthier. And so as a result, the premiums are able to go down. So there’s, that’s one mechanism. It’s not a perfect one. Doesn’t not a silver bullet. Doesn’t fix all the problems in healthcare, but it can be an effective way to try to tackle some of this, the increasing premium issue. The other one I might highlight is one of the previous COVID bills had put in place requirement that states could had to stop checking eligibility for those that are on the Medicaid program. And as a result during the public health emergency.
Josh Archambault:
So as a result, there’s a number of individuals who no longer qualify for the program, their income’s too high, they’ve moved out of state number, any number of reasons in that they’re still on the Medicaid program. The insurance companies, the managed care companies are being paid every month for their coverage. And there is a provision in this bill if it were to pass and stay in the Senate version, that’s starting in April of 2022 states could at least restart eligibility. Redeterminations why does this matter? Well, Medicaid is run by states and as a result, the states have to pay a portion of that cost. And so as individuals sit on the program, that means more and more state dollars are going to paying for people who aren’t eligible for the program. And you have to find that money somewhere. So that comes from small businesses who have to pay slightly higher tax rates to pay for that. For individuals, you have to find more or money to pay for that. So I hope that there’s some bipartisan agreement, whether it’s on this bill or another, that we are able to restart the eligibility determinations so that we make sure that we’re only paying for Medicaid coverage for people who are in fact eligible,
Joe Selvaggi:
To be clear, we’re not talking about the proverbial pushing the woman off the cliff in the wheelchair. When we talk about eligibility, we’re talking about people who had had no scrutiny of their Medicaid application during COVID, and now in April of 2022, someone would look at their file and say, look respectfully you make too much to be eligible for Medicaid. You need to be on one of the more either the ACA or something else, is that right?
Josh Archambault:
Correct. Yep. Or an individual has them and think about it in new England. The states are close. If somebody were to move the states don’t do a great job communicating with each other and whether somebody’s moved, they would at least at minimum say, you know, oh, this individual looks like they no longer live in our state. So we’re gonna stop paying the managed care company every month for somebody who is not even here.
Joe Selvaggi:
All right. And of course that money being aid for the person who lives in here is money. That’s not going to schools and roads and police and all the other great things we want from government. So a costly mistake, so that that’s some good news. We were, we had to look around quite a bit, but we found some good news there in the build back, better plan. Let’s focus now on Massachusetts. We’ve we were, I guess, pioneers in the role healthcare reform. And we got quite a bit of money in the American rescue plan act. I think somewhere around $4 billion. We’re talking about that’s being debated up on the top of beacon hill. What can you say about how that might be spent on healthcare here in Massachusetts? What are the issues being debated here?
Josh Archambault:
Sure. So the, the kind of status of where this is, is there has been a $4 billion bill that’s made its way through the legislature. And there’s been a lot of disagreement between the governor about who gets to appropriate this money, or whether it’s the legislature. And the legislature said in 163 page bill we’re, we’re gonna tell you how to spend the, at least the first $4 billion. Now, now mind you additional money went to the states excuse me, to the cities and towns that they have to spend as well. But the state is also funneling some of this money down. And one of the interesting initial observations in some of the press coverage was there was quite a bit of earmarking in this bill that didn’t really seem to be connected to healthcare or COVID related relief, you know refurbishing you know, gazebos in certain towns money going towards Irish, social clubs road repaving, all, all those good sorts of Christmas tree earmarks that we typically see in some of these bills, but, but putting it aside in the grand scheme of things, the book, the bulk of this money, I think, is spent on areas that are public health related or healthcare related there’s millions of dollars spent for on local health boards, $200 million that they’re allocating to local health boards, some for data collection and other infrastructure.
Josh Archambault:
I think there’s really good questions to be had about how did our public health infrastructure work during COVID, what could they have done better? Where did they fail? I think there will be continued debate here on how should this money actually be spent. And are we in a much stronger position going forward? There’s 260 million that is being allocated to finance really strained hospitals. And so again, this has been a perennial issue in the legislature about who qualifies as a financially strained hospital, how well run are these hospitals. And I think Pioneer’s interest here is just around accountability and transparency of how this money will be ultimately spent to make sure that on the back end, after spending these billions of dollar, that we end up with a health system that is stronger and more efficiently run, and this isn’t just kind of being dumped into a black hole here, but there’s a number.
Josh Archambault:
I mean, we could literally spend 30 minutes going through all of the earmarks of money spent on behavioral health loan, re payments for counselors, which there’s certainly a need here. We hear almost to every day of examples in which emergency rooms are strained by behavioral health cases, in which there are not enough behavioral health beds going forward. So it puts hospitals in a tough spot when they’re trying to respond to COVID related issues when they have so many folks that are in crisis from a behavioral health standpoint going forward. So these are, are some of the overarching debates. It’s a lot of money being spent on community healthcare centers and the behavioral health world going forward. The real discussion to be had going going forward is just what sort of tracking and understanding what we have on how the money is actually being spent and whether it’s making a positive impact or just being spent for the sake of spending it.
Joe Selvaggi:
Well. Yeah, well, gosh, I would imagine one could be very sympathetic to the fact that COVID 19 was an extraordinary strain on the healthcare world. So financially stressed firms could either be financially stressed, cuz they’re poorly run or financially stressed because COVID imposed an extraordinary burden on, on that firm, how who’s in the business of around, which is which how, how do we know that we’re not merely subsidizing a, a a dysfunctional healthcare organization or whether they were in the front lines doing battle with COVID and this extraordinary event, once, once we’re past it, they can return to some sense of normalcy and that that money will have been well spent effectively keeping alive, affirm that endured an extraordinary strain.
Josh Archambault:
I think you’re asking exactly the right question, Joe. I’m not sure that there’s a great answers here in this bill or in the conversation on beacon hill. Unfortunately, the political are aligned here to not have some of those tough conversations. I mean, the other debate in this bill that has received some attention has been around payments for essential health workers and who qualifies for that. There’s been some disagreement about the governor’s definition of that versus what the legislature, the legislature tries to set up a commission, a massive commission. I think it’s over 30 people to determine who should qualify and how to get those payments out. And I think this is, this is where this governing gets really complicated, really fast. I think there’s general agreement that most people in the Massachusetts and other states were really appreciative of healthcare workers and others that were coming to work every single day during the most uncertain days of the pandemic and really putting themselves at, at risk.
Josh Archambault:
But once you start to get into conversations around teachers, social workers, foster parents, you know, garbage individuals working outside, I think it gets a little harder in a little trickier to find universal agreement on who gets these additional payments. So whether it’s a large institution being given money, just because they’re a healthcare institution or involved in healthcare, or whether it’s an individual person who the state is determining, they want to now give additional money. I, I think at minimum there needs to be a robust public discussion about this, not just inside the golden dome on beacon hill, but then ultimately I think there needs to be some transparency about, do we actually deliver this money? What, what is a result of this money, particularly for the institutions? Are they actually investing the money so that they’re better prepared for a pandemic long term? Or are they spending this money in a way to just backfill salaries for individuals or others in which there are underlying concerns about whether this is a going concern going forward from the business side.
Joe Selvaggi:
So getting close to the, our the end of our time together. So I always like to ask us particularly around direct policy questions. You mentioned the the governor and, and the legislature having a healthy, lively debate on who, whose prerogative it is to decide where this money is spent. If Josh Archambault were a king for a day or a, an all powerful governor. How would you want to see some of this money spent knowing that you are a healthcare policy expert and, and, and want to see the most value for the buck, the most efficient use of that money to ensure that the most people can be helped? What, what would you do?
Josh Archambault:
Well, I mean, this, this money from the federal government was allocated to try to help with pandemic preparedness. So for me, that would be the first and foremost, my focus, I, I, I think whether gazebos or helping the Wang and Schubert theater with money is probably not going to be near the top of my list. So I think that’s the first thing. And, and, and I think my criteria would be twofold. One is to make sure that we are understanding where there were gaps, where, where were there problems? Was it on the data side? Was it on the infrastructure side? Was it on the communication side? If we were to come into 20, 23 or 2025, what needs to be in place now that we don’t have to make sure that our ability to continue in some sense of normalcy when another pandemic comes, cuz inevitably there will be another one.
Josh Archambault:
How do we make sure that we have that flexibility and infrastructure in place to be able to, as a society and the state move forward? Some of that is related to human infrastructure. We don’t have a enough certain kinds of providers. And so I, I am sympathetic to looking at ways to increase the amount of providers that we need to be flexible. I, I would make sure that there’s a discussion about removing barriers that are in place. Some might have financial implications, some may not. And then finally, I probably wouldn’t spend all the money if we can’t find ways that actually meet towards goals. And so perhaps whether it’s returning the money, whether it’s giving property tax relief, I mean, for individuals that were struggling to get to work there, there is something here to be said that the, the help most helpful thing for them going forward would be some sort of reduction in the cost of their living instead of just spending the money on some of these pet projects going forward. So for me, that’s, I would make sure that we have some pretty strong criteria by which we’re trying to make these decisions looking at how do we best prepare and how do we actually help people that were impacted by the pandemic?
Joe Selvaggi:
Well, I’m gonna ask this, not knowing the answer, but this is, you know, healthcare and healthcare research is part of the policy. Part of the, in a, a pioneer, are you planning on doing any research in, in a sense preparing a plan that said this is what Massachusetts or the, the nation in general should be doing to prepare for the next pandemic if it’s a next year or a hundred years, hence is there any research where we analyze what we did right. And wrong and layout let’s say a, a a menu or a a recipe for moving forward in, in the future.
Josh Archambault:
Yeah. You know, it’s something that we have had conversations about and there’s a lot of our work that I think is very, very relevant to this conversation that, that the complex answer to this though, is that there’s both a federal and a state discussion to be had here. So at the state level, certainly the questions that need to be had are what are the barriers that were in place pre pandemic and maybe still are in place that would allow the state, the health system be a lot more flexible going forward. These are things that we’ve kind of touched on in some of our prior conversations, whether it is across state line telehealth, or making sure that all providers can use telehealth, whether it’s allowing certain providers to have the flexibility, to practice on their own for things that they’ve been trained to do something called scope of prep, instead of always having to be, have oversight or physical oversight, whether it’s the ability for health institutions to have flexibility, to move staff to different sites.
Josh Archambault:
There’s some barriers to that that had to be waived during the pandemic, whether it’s institutions having the flexibility to open more ICU beds without having to go through a massive credit process and application with the state to get permission to do so. There’s a lot of things that the state could do on the policy side moving forward. I, I certainly think pioneers done lots of work in the space around data reporting, whether it is in nursing homes or others, whether there’s certainly a lot of improvement to be made there to make sure that when we do have something pop up, not only is it being flagged for the relevant state authorities, but the public is able to be informed and that data is easily accessible. So people understand what’s what’s going on, where the high risks are, where the cases are coming from, instead of feeling like they’re ill-informed.
Josh Archambault:
And then for our podcast in the future, certainly a conversation to be had about what needs to happen at the CDC at the FDA and vaccine development. If that’s part of a pandemic response that there’s lots of opportunities there, I think for improvement and ways to tweak, even now, it doesn’t have to be for a future pandemic. So people better understand what’s going on, what the risks are. They can properly assess for themselves and their families going forward. And so we can avoid some of the issues that we had in the past, or the fact that governors or others had to wave a lot of these barriers that were in place.
Joe Selvaggi:
It’s interesting. Everything you prescribe, I think is Pioneer’s research going back 20 years many of the provisions you described as being, making us more ready for the next pandemic is just good advice for healthcare in general. So there really doesn’t seem to me by my reckoning and all shows we’ve done on healthcare, and COVID, much light between good healthcare reform and preparation for the next pandemic. They seem like almost identical prescriptions.
Josh Archambault:
I think there’s some truth to that. <Laugh>, I mean, we don’t need to make this overly complicated going forward. You know, when you’re sick, there’s a lot of complexities to that. And so we want to make sure that we have the most flexible dynamic, innovative system that we can have. And a lot of that is looking at incentives and removing barriers to be able to address that, whether it’s COVID-related or whether it’s other chronic condition related.
Joe Selvaggi:
That’s a wonderful place to end the show. We tied it all together with a nice bow at the end. So thank you very much for joining the show. Again, Josh you’re as always a very informed and clear guest and our listeners are grateful for it.
Josh Archambault:
Great. Thanks, Joe.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoyed today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcast, or podcatcher, it would make it easier for others to find Hubwonk if you offer a five-star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends, if you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
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