Pushing to expand Social Security, Clinton makes history

August 4, 2016

Hillary Clinton made history last week in Philadelphia when she became the first woman ever nominated for the presidency by a major political party. But she also broke new ground by becoming the first presidential nominee in 68 years to use her acceptance speech to call for expanding Social Security.

Her comments signal a remarkable reversal in the Social Security policy debate, especially within the Democratic Party. After focusing for years on raising program revenues to preserve existing benefits, many party leaders, including Clinton, are now trying to boost benefits.

For a program that paid nearly $890 billion to 60 million beneficiaries last year, Social Security is barely discussed when presidential candidates accept their party’s nomination. More than half of the 42 acceptance speeches delivered since the Social Security Act was signed in 1935 didn’t reference Social Security at all, and most of those that mentioned the program did so just once, often only in passing.

The exception occurred in 2000. As George W. Bush accepted the Republican nomination that year, he mentioned Social Security five times—more than any other Republican—vowing to “strengthen” the program. Al Gore named Social Security a record 12 times when he became the Democratic nominee a few weeks later. He stressed the need to protect Social Security and shore up its financing but rejected Republican proposals to divert part of the program’s taxes to personal accounts. Neither candidate advocated raising benefits.

Clinton is only the second nominee of a major political party to call for expanding Social Security. The first was Harry Truman, who declared support for extending coverage and raising benefits in his 1948 nomination acceptance speech, when Social Security was much smaller than it is today.

If elected, how would Clinton expand Social Security? She didn’t give details at the Philadelphia convention, but the Democratic Party platform and her campaign website call for boosting survivor benefits and providing Social Security credits to people who interrupt their careers to care for family members and friends. They also advocate raising taxes on high-income workers to pay for these benefit sweeteners and close Social Security’s long-range financing gap.

Although relatively modest, these reforms could improve financial security for older women, especially widows who are now more than three times as likely to live in poverty as married older adults. But as our colleague Melissa Favreault has pointed out, improving survivor benefits won’t help the growing ranks of low-income older women who never marry or who divorce before qualifying for Social Security spouse and survivor benefits, and providing caregiver credits could raise benefits for many higher-income women who don’t need more support.

Clinton could choose to pursue Bernie Sanders’s much more ambitious goals for Social Security. He has proposed creating a minimum Social Security benefit equal to 125 percent of the federal poverty level for retirees with at least 30 years of covered employment, raising cost-of-living adjustments, and reworking the benefit formula to increase payouts to all retirees but disproportionately to beneficiaries with low lifetime earnings. To pay for this expansion and improve the program’s financing, Sanders would subject all earnings above $250,000 a year to the Social Security payroll tax, which now applies only to the first $118,500 earned each year. He would also impose an additional 6.2 percent tax on investment income for high-income people.

One of us (Smith) recently used DYNASIM, Urban’s dynamic microsimulation model, to evaluate Sanders’s proposal. Once fully phased in, these expansions would significantly raise after-tax incomes for lower and middle-income retirees. Very high income older adults would fare somewhat worse under the plan because the analysis assumes that employers would trim wages to offset the additional payroll taxes imposed by the plan.

Impact of Sanders's Social Security Expansions on Family Income

Sanders’s plan would also improve Social Security’s deteriorating financial situation. The program’s trustees now project that system costs will exceed total revenues beginning in 2019, and the deficit will grow until the trust fund is depleted in 2034. Thereafter, Social Security would be able to pay only about three-quarters of scheduled benefits. The additional tax revenue in the Sanders plan would extend solvency until 2073, nearly 40 years longer.

Although Clinton mentioned Social Security only once in her acceptance speech last week, her comments could mark a turning point in the Social Security reform debate. As stagnant wages, disappearing defined benefit pension plans, and rising out-of-pocket health care costs stoke concern about retirement security, the debate may be shifting from a focus on containing costs to expanding the system.

But Clinton’s shift in tone doesn’t end the debate. The Republican Party platform remains firmly opposed to any Social Security tax hikes. And devoting more money to Social Security leaves less for other policy goals, like trimming the national debt, helping low-income children, and rebuilding our crumbling infrastructure. At a minimum, perhaps the next president and Congress can begin serious discussions about how to fix Social Security’s long-term financing problems to safeguard this crucial program for future generations.


From TaxVox: Kaine's tax record reflects Clinton's present and possibly future

July 27, 2016

This post originally appeared on TaxVox.

Tim Kaine, Hillary Clinton’s choice for vice president, served as governor of Virginia from 2006 to 2010 (the state has a one-term limit). During his four years, Kaine proposed tax hikes to pay for new government programs and tax cuts for low- and middle-income residents. It’s a combination that closely parallels Clinton’s tax proposals for the nation. However, political opposition in his state legislature derailed Kaine’s larger ambitions and forced him to settle for smaller changes.

Kaine’s big goal was raising taxes to pay for new transportation spending. He asked the Virginia legislature in 20062007, and 2008 for a mix of tax hikes on car sales, auto insurance premiums, and driver fines. And each time the legislature rejected his ideas in favor of debt financing and transfers from the general fund.

Broadly, Kaine’s preference for raising taxes to fund road and transit projects is similar to Clinton’s plan to fund education and infrastructure spending with new taxes. But there is one big difference: Kaine proposed tax hikes that would have affected most Virginians while Clinton would target only the most wealthy Americans.

As governor, Kaine was not a one-note act on taxes. He also advocated several tax-relief measures. In 2007, Kaine and the legislature raised Virginia’s income tax filing threshold from roughly $7,000 to $12,000 for individuals and from $14,000 to $24,000 for married filers, taking more than 300,000 Virginians off the tax rolls. The bill also raised Virginia’s personal exemption from $900 to $930, a Kaine accomplishment that mirrors Donald Trump’s idea to raise the standard deduction (though on a much smaller scale). By contrast, Clinton would leave overall taxes roughly unchanged for middle-income households, though she’s promised to deliver a tax cut for low- and middle-income Americans later in the campaign.

Kaine also signed three sales tax holidays into law: one for back-to-school supplies, one for energy-efficient products, and another for hurricane-preparation gear. These brief periods of tax-free shopping are popular with politicians and voters, but don’t actually benefit most shoppers. (All are still in effect, though the state recently combined all three into one weekend.)

In a move that goes against the Democratic grain, Kaine also backed repeal of Virginia’s estate tax. While Trump wants to kill the federal levy, Kaine’s top-of-the-ticket running mate would boost the national estate tax.

Governor Kaine failed at two other major tax changes. During his 2005 campaign and throughout his administration, he pushed for a homestead deduction that would have delivered a 20-percent property tax rebate to homeowners. However, Republicans in the legislature scuttled the plan, afraid it would lead to tax hikes on commercial property.

And in one of his final acts as governor, Kaine’s proposed 2010-12 budget would have hiked the state’s top income tax rate from 5.75 percent to 6.75 percent. His idea was to swap the state’s regressive personal property car tax for a progressive income tax hike mostly aimed at wealthier Virginians. However, after the term-limited Kaine left office, his Republican successor dropped the proposal.

Finally, as you hear stories about Kaine’s successes or failures as governor of Virginia, keep in mind that state chief executives have a relatively limited impact on their economies. This is as true for Kaine as for Trump’s running mate, Indiana Governor Mike Pence. For example, Virginia’s unemployment rate was below the national average during Kaine’s tenure—as it’s consistently been for decades

So stick with his policy decisions. Kaine was not afraid to propose both tax hikes and tax cuts as governor. He cut deals with his political opposition but was also stonewalled on major proposals (unsurprisingly, tax cuts were easier to pass than tax hikes). Given ongoing gridlock on Capitol Hill, his experience could prove useful if a future Congress tries to cherry-pick ideas from Clinton’s grab bag of tax proposals.


Student debt relief is the wrong way to promote entrepreneurship

June 28, 2016

Today, Hillary Clinton released a new policy agenda aimed at increasing technology, innovation, and entrepreneurship. These are laudable goals, but Clinton’s proposal to provide student debt relief to entrepreneurs is the wrong way to accomplish them. This proposal is based on a weak evidence base and would result in an inefficient allocation of subsidies.

Clinton’s proposal would allow student borrowers to stop making payments on their student loans—with taxpayers covering the interest—while they are starting new businesses. In addition, the founders of particular categories of businesses, such as those “that provide measurable social impact,” would be eligible for up to $17,500 in loan forgiveness.

The idea that student loans hold back entrepreneurship is based on shoddy evidence, such as public opinion polls in which respondents report that they did not start a business because of their debt. Polling data don’t tell us anything about the causal relationship between student loans and entrepreneurship, a question on which there is no high-quality evidence. (Gallup is probably the worst offender in terms of misinterpreting such polls.)

Student debt needs to be considered in light of both the repayment burden it imposes on borrowers as well as the returns to the educational investment it was used to finance. One way to avoid student loans is to skip college, which may have an even larger negative effect on entrepreneurship.

It is also important to note that income-driven repayment plans provide a safety net that protects all borrowers, including entrepreneurs, from unaffordable monthly payments during periods of low income.

Efforts to stimulate entrepreneurship through changes to the student loan system are likely to be inefficient and unfair. Clinton’s interest-free deferral proposal, for example, would provide the largest benefits to the borrowers with the largest loans. These high-debt borrowers may or may not be those most in need of taxpayer subsidies to help them start a new business, as the amount borrowed depends on a range of factors including family income, the college attended, and work and spending habits while in college.

The student loan program is already used for too many purposes for which it is ill-suited, such as subsidizing the employment of borrowers in the public and nonprofit sectors. There is nothing inherently wrong with subsidizing certain sectors of the economy—whether struggling nonprofits or Silicon Valley startups. But policymakers should do so directly, such as through tax credits, rather than through the student loan system.


If we elect a “girl” president, would we pay her the same as the “boy” president?

May 26, 2016

A young girl in Las Vegas recently asked Hillary Clinton if, were she elected, she would be paid the same as a male president. “This is one of the jobs where they have to pay you the same. But there are so many examples where that doesn't happen,” Clinton answered.

Unsurprisingly, inequality is a major topic in the 2016 presidential race. That discussion often takes the form of the “one percent” versus the middle class or those with low incomes, but inequality is prevalent throughout the workforce when we simply look at gaps in earnings between men and women.

Although smaller than it was 40 years ago, the pay gap between men and women has remained largely unchanged over the past decade. In 2015, for example, women’s median earnings were about 81 percent of men’s. Though the gaps vary by race, women of all races/ethnicities earn considerably less than men of that race/ethnicity.  

A 2009 report by the US Department of Labor shows that most of the disparity between men’s and women’s wages can be attributed to “individual choices.” According to that study, greater percentages of women in the labor force work part time or leave the labor force for child birth, child care, and caring for older relatives. The same study found that a larger percentage of women also value “family-friendly” workplace policies, which often come at the expense of higher salaries.

However, a new study by researchers at Cornell University shows that as women move into industries and occupations previously dominated by men, pay for those jobs fell. And even when these “individual choices” are taken into consideration, there is still a 5 to 7 percent unexplained gender wage gap between men and women. 

These gaps are real and consequential. And they have implications not just in the short term of what people can do now, but also what they will be able to do later in life. Lower earnings now mean lower Social Security benefits later. A woman earning 95 cents for every  dollar a man makes might sound trivial at first, but it adds up to a catastrophic loss over time: Over a 40-year career at $50,000 per year, a woman would lose $100,000 in earnings relative to her male counterpart.

These numbers place the discussion among political candidates in some context. Some candidates have proposed policies that could work to close the pay gap, while other policies might end up widening it. There are a few, however, that would directly affect the earnings gap between men and women.

Yet, even these policies (and others not mentioned) won’t fully address the pay gap. Implicit or explicit discrimination will affect pay levels and growth; people may not be promoted; and family and other duties may interfere with career. The workplace is not the only place where inequities in pay can be addressed. But it is time for the presidential candidates to talk openly about the gap between men and women in the workforce, and to propose serious policy solutions. 


Sanders is right: Philadelphia’s proposed soda tax is regressive, though small

April 26, 2016

Last month, Philadelphia became the latest city to propose taxing soda and other sugar-sweetened beverages. Such taxes have become popular as more evidence links sugar consumption to poor health and greater health expenditures.

With Pennsylvania’s presidential primary today, both Hillary Clinton and Bernie Sanders weighed in on the proposal. As The Upshot reported Friday, Clinton supports the tax, much of whose revenue is earmarked for early childhood education programs. It’s a laudable goal, especially combined with the evidence of high returns to investment in early childhood education.

But, as Sanders fired back, so-called “sin taxes” tend to be quite regressive, falling most heavily on low-income families. True? If so, is it a good argument against the tax?

Urban researchers recently published a paper examining the effects of soda taxes. Sanders is right: a soda tax would fall most heavily on the poor relative to their income. A one-cent per ounce tax would produce an average tax of 0.19 percent of income for the lowest quintile of earners, while the same tax would produce an average tax rate of 0.04 percent for the highest quintile.

On the other hand, tax rates of less than one-fifth of one percent are not very big. Even with Philadelphia’s three-cent tax, the lowest quintile might pay an extra $75 per year, all else equal. For some households $1.50 a week makes a real difference, but for most it probably doesn’t.  

Sugar tax

But, while Sanders’s critique is technically right, there might be more important issues to consider. For example, as Donald Marron wrote recently:

Another issue is how well sugar consumption tracks potential health costs and risks. If you are trying to discourage something harmful, taxes work best when there is a tight relationship between the “dose” that gets taxed and the “response” of concern. Taxes on cigarettes and carbon are well-targeted given tight links to lung cancer and climate change, respectively. The dose-response relationship for sugar, however, varies across individuals depending on their metabolisms, lifestyle, and health. Taxes cannot capture that variation; someone facing grave risks pays the same sugar tax rate as someone facing minute ones. That limits what taxes alone can accomplish.


In addition, people may switch to foods and drinks that are also unhealthy. If governments tax only sugary soda, for example, some people will switch to juice, which sounds healthier but packs a lot of sugar. It’s vital to understand how potential taxes affect entire diets, not just consumption of targeted products.

In other words, if many of the people affected by the new tax have only a “loose” relationship between sugar consumption and poor health, the tax might not buy much in terms of health improvements. That alone may not be a problem, so long as the tax still raises new revenue for early childhood education.

But its total revenue effects are uncertain. If people are highly responsive (and they tend to be) to the price increase—over $4 for a 12-pack of soda—they may just switch to other, non-taxed beverages. In other words, such a high tax may just drive people away from soda and similar beverages, failing to raise much new revenue. It is also possible that people may simply go outside of Philadelphia to buy their soda.

On the other hand, Philadelphia predicts that it’ll raise almost $100 million annually. Even if that guess is twice as high as reality, the city would raise $50 million in new revenue, which would buy considerable new early childhood education and other services.

Perhaps the soda tax’s uncertainty is in itself a good reason to support it. Such taxes are growing in popularity and the sooner we have real data on them, the sooner we can understand with certainty their real-world effects.


To meet multifaceted needs in Indian Country, Sanders and Clinton should combine their proposals

April 5, 2016

Hillary Clinton and Bernie Sanders have both recently done something rare for a presidential campaign: they have elevated Native American issues (they’re the only candidates to do so). With a rally at the Navajo Nation, the largest reservation in the United States, Sanders spoke about his plan to address profound economic and infrastructure inequities faced by many Native communities.

In a presidential campaign filled with abstract rhetoric about trade policy, counterterrorism, and 2,000-mile border walls, voters may be surprised at the depth of Indian Country’s challenges. Some are serious, but perhaps not shocking. For example, between 2006 and 2011, the tribal unemployment rate was 16 percent, twice the 8 percent rate among non-Natives in the United States. Tribal poverty rates were also high: 30 percent overall and nearly 40 percent for children.

But other inequities are truly eye-popping. Between 2006 and 2010, more than 1 in 20 tribal households lacked at least one of these basic household features: a flushing toilet, hot and cold running water, or a bathtub or shower. That is a rate 12 times higher than the overall rate. Native households living in tribal areas also have a housing overcrowding rate almost four times as high as the non-Native population overall. Perhaps worse, these disparities persist despite considerable gains in housing conditions since 2000.

Native American poverty rates

Would Sanders’s plan be sufficient to improve housing and economic conditions in Indian Country? Probably not, but interestingly, if his plan were combined with Hillary Clinton’s, together they might. To see why, consider what Sanders’s plan would do:

Senator Sanders’s plan is well suited to improve and expand the housing stock on tribal lands. He proposes fully funding the Indian Housing Block Grant, the primary funding stream for tribal housing, and launching a $1 trillion infrastructure improvement program targeting high unemployment areas in Indian Country and elsewhere.

Because his plan includes a broader set of infrastructure improvements than Clinton’s, including expanding electric networks, it would provide tribes with the infrastructure they need to improve quality of life and bring down housing development costs.

Support for housing and infrastructure are necessary, but Clinton’s proposal would provide other key economic development resources. It would promote youth employment and small-business entrepreneurship in underserved communities.

It would also increase funding for community development financial institutions (CDFIs), which have helped promote entrepreneurship in tribal areas since the 1990s. Native CDFIs have expanded capital and fostered sustainable small businesses in many tribal communities. The number and capacity of Native CDFIs has grown in the past 10 years, but tribal private-sector activity and Native CDFIs were hard hit by the recession. Additional supports for these critical institutions would help tribes regain momentum as they chart their own course for longer-term economic development and growth.

The needs in Indian Country are great, and they deserve multifaceted solutions. While both candidates get a lot right, including their mutual emphasis on improving tribal consultation and self-determination, whichever candidate ends up being the Democratic nominee should consider adopting the strengths of his or her opponent’s platform in order to support our Native communities. 


What could the candidates' tax plans mean for you?

March 25, 2016

How could the presidential candidates' tax plans affect you? Tax Policy Center and Vox partnered to create a calculator that shows how much your federal tax liability could change under each plan.

Here's an example that illustrates what a single filer with one child and making $40,000 a year would pay, according to the plans and proposals laid out by Donald Trump, Ted Cruz, Hillary Clinton, and Bernie Sanders.

Tax Policy Center and Vox tax calculator

Find out what the candidates' tax plans could mean for you.


From TaxVox: Hillary Clinton would raise taxes on high-income households by $1.1 trillion over 10 years

March 3, 2016

Democratic presidential hopeful Hillary Clinton would raise taxes on businesses and high-income households while making minimal changes to the after-tax incomes of those with low and moderate incomes, according to a new analysis by the Tax Policy Center. Overall, Clinton would boost federal revenues by $1.1 trillion over the next decade. Those changes would make the tax code more complex, especially for high-income households, and would reduce incentives to work, save, and invest.

Clinton would retain the basic structure of the current income tax, in contrast to GOP presidential candidates Marco Rubio and Ted Cruz, who would shift to a consumption-based tax. According to TPC’s analysis, Clinton’s proposal roughly achieves her goal of raising taxes only for those making more than $250,000, though how closely she hews to her promise depends on how she defines income.

Tax changes

Clinton’s tax plan increases taxes on the wealthy to pay for the middle-income kitchen table social programs she’s been promoting, such as help with college and medical costs. And by raising taxes by $1 trillion, her plan could modestly reduce the projected federal debt over the next decade—unless she spends the money on the additional middle-income tax cuts she’s promising.

Hillary Clinton tax plan

On average, households would pay about $650 more in taxes in 2017 under Clinton’s proposal, a 0.9 cut in after-tax income. By TPC’s measure of cash income, which is broader than commonly used measures such as Adjusted Gross Income, those making less than about $80,000 would face very small tax hikes, averaging between $4 and $44.

Those tax increases are not due to direct tax increases on individuals. Rather they represent their share of her proposed tax increases on businesses. TPC estimates that shareholders bear 60 percent of the corporate tax, all capital owners bear 20 percent, and workers bear 20 percent.

Households making $143,000 to $296,000 would pay no more than a few hundred dollars in extra tax on average.

However, the highest-income 1 percent would face an average tax increase of about $78,000, a 5 percent reduction in their after-tax income, while the top 0.1 percent would pay $520,000 more, 7.6 percent of their after-tax income. Overall, more than three-quarters of Clinton’s tax increase would hit the top 1 percent (who make more than $732,000). The highest-income 0.1 percent of filers (who make more than $3.8 million) would pay more than half of her tax increase.

Read the rest on TaxVox.


Trump and Clinton plans for veterans leave out affordable housing

March 3, 2016

Donald Trump and Hillary Clinton have both released plans to reform the Department of Veterans Affairs (VA) to help veterans and their families. Both plans call for better access to health care, especially for treating posttraumatic stress disorder and traumatic brain injury. Our recent study on veterans at risk of homelessness highlights the importance of these issues. But both plans are vague in details and, more important, both plans leave out a big issue that especially affects recent veterans: affordable housing and homelessness prevention.

As I have written before, almost 1.5 million veteran households spend more than 50 percent of their income on rent. That’s too much of their monthly budget, leaving them at serious risk for eviction and homelessness.

Compared with veterans from earlier conflicts and wars, the problem is worse for veterans who served after September 11, 2001. And the problem is pervasive: 87 percent of extremely low-income veterans in this cohort pay too much for rent. It’s worth noting that about 70 percent of veterans who served in earlier conflicts are also severely rent burdened.

Many veterans are rent burdened
Note: "Extremely low income" is 0-30 percent of Area Median Income (AMI); very low income: 31-50 percent of AMI; low income: 51-80 percent of AMI. So, for example, in Maricopa County, Arizona, AMI is $64,000.Extremely low-income at 30 percent of AMI would be $19,200 per year.

The Obama administration has made significant progress in reducing homelessness among veterans. Both candidates should be thinking about how to finish the job of ending veteran homelessness, and how to prevent veterans from becoming homeless in the future. To do so, they need plans that increase veterans’ access to affordable housing.

A promising solution is to create a housing voucher program for veterans that links housing subsidies with employment assistance. Such a program could go a long way in making sure we are honoring our obligation to those who served our country.



What the evidence says about Clinton's Economic Revitalization Initiative

February 18, 2016

Last Friday, Hillary Clinton released the details of her Economic Revitalization Initiative to expand opportunities in “communities left behind.” We asked several of our experts what the evidence says about different elements of her plan.

On jobs programs:

“Clinton’s jobs agenda focuses on the right problem: the weak employment and career outcomes of millions of American youth. The proposals to create jobs and apprenticeships can not only help young people today, but provide valuable work experience for future jobs.

“Two caveats are appropriate.  First, job creation programs vary greatly in quality; while an experimental study of YouthBuild is currently under way, whether the program’s benefits exceed costs remains uncertain. Second, apprenticeships have a particularly strong record; they can help firms and lead to long-term success in rewarding careers, not simply short-term employment. But tax credits alone may not be enough; South Carolina’s Apprenticeship Carolina expanded apprenticeships by combining tax credits with extensive marketing at the state and firm level.”

- Bob Lerman

On local infrastructure:

“Clinton’s economic opportunity agenda builds on an earlier $275 billion infrastructure plan by earmarking $50 billion to traditionally underserved communities.

“The plan echoes decades of research on place-based investments, although conclusions from this work are not always clear cut. Clinton tries to avoid some pitfalls by focusing on transportation investments and quality public services, which can enhance productivity and improve quality of life regardless of whether they promote economic mobility.

“Clinton would also reexamine transportation funding formulas that direct money to all the wrong places. Of course, incentivizing states and localities to pick the right projects may be easier said than done. In a 2010 GAO survey, only one of every five states said that conducting economic analysis of project costs and benefits was important.”

- Tracy Gordon

On jobs for the formerly incarcerated:

“Hillary Clinton’s plan includes a $5 billion investment in job programs for formerly incarcerated individuals, less than half of whom will find stable employment after release and most of whom will earn less than their non-formerly incarcerated counterparts. Given that nearly 30 percent of US adults have a criminal record, will $5 billion be enough to address this large and growing problem? 

“If so, it is critical that Clinton support reentry programs with a proven track record. Comprehensive programs like the Center for Employment Opportunities (whose efforts have proven promising, particularly among high-risk individuals) are more successful at improving outcomes. They focus not just on job readiness skills but also on other barriers to employment that formerly incarcerated individuals face, including housing restrictions, loss of public assistance, substance abuse, and mental health issues.”

- Jennifer Yahner

On credit availability:

“Clinton proposes a few steps to address limitations on access to mortgages that have grown since the recession. The Housing Finance Policy Center’s Credit Availability Index (HCAI) shows that mortgage credit continues to be far tighter than it was pre-bubble. Dodd-Frank and the Consumer Financial Protection Bureau have helped risky products disappear. Nevertheless, the HCAI demonstrates that even without risky products, the market is taking just over half the credit risk it was taking in 2001.

Credit availability

“Over the next 15 years, housing demand will be driven by minorities, as will all growth in homeownership. Income, wealth, and credit gaps between whites and minorities challenge this growth; the alternative is stagnation of the housing market. The government, Fannie, and Freddie can help make homeownership growth possible by giving lenders greater clarity on their responsibilities for loan and servicing quality—which Clinton calls “clarify[ing] the rules of the road.” Clinton would also help responsible homeowners save for a downpayment, support counseling programs to help borrowers become sustainable homeowners, and update underwriting tools—including credit testing tools.”

Ellen Seidman and Laurie Goodman

On small business and economic development:

“Clinton’s plan proposes five steps to help support small businesses and encourage economic development in areas of need. Evidence supports much of this agenda –the New Markets Tax Credit has had generally positive results, and the State Small Business Credit Initiative has led to exciting recent innovations. But the Community Reinvestment Act desperately needs to be modernized, not just enforced, to match today’s lending realities. And Community Development Financial Institutions have yet to figure out how they will fit into the evolving financial landscape—though in an intriguing new partnership, the Opportunity Fund (a CDFI) will work with loan applicants that Lending Club turns down.”

- Brett Theodos