American Idea Foundation

Measuring Results, Expanding Opportunity, Improving Lives.

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Speaker Ryan and Governor Scott Walker discuss Policing Reforms, Opportunity Zones, and Expanding Economic Opportunity

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July 6, 2020

Last week, American Idea Foundation President and former House Speaker Paul Ryan spoke with former Wisconsin Governor Scott Walker on his podcast “You Can’t Recall Courage.”  The two long-time elected officials discussed the importance of seizing the moment to enact meaningful policing reforms following the killing of George Floyd, the need to increase economic opportunities for all Americans, and how to properly enact the Opportunity Zone law so it revitalizes communities in-need. Highlights of Speaker Ryan’s answers (which have been lightly edited for clarity) follow and the entire podcast can be heard here.  

Restoring the American Idea

“The biggest concern I’ve had in society lately is that so many people just don’t think the American idea is there for them anymore. You know, the idea that the condition of your birth doesn’t determine the outcome of your life, that you can make in this country if you just work hard, you play by the rules and, oh by the way, your kids will be better off than you. There are so many people in this country who do not see that or believe that anymore. And that, to me is a real problem. It’s the biggest test of our generation.”

Responding to the Unique Challenges of 2020 

“It has been just an amazing year in that there has just been so much thrown at the world, the American people, and the country. Just an incredible amount.  We are such a resilient country. Our institutions are still strong and I think we’ll get out of this moment all the stronger for it in the future…. 

“The George Floyd murder was a horrendous event that I think served to awaken so many people, open so many hearts, pull the scales off of so many eyes, and people really did see that there is a problem. There really is systemic racism, and those protests, all of those valid and legitimate protests, [showed that] it is up to us as citizens and policymakers…. to make this time different with respect to the civic response…. We have got to make sure that we as citizens, as people, as policymakers, get the right lesson out of this.”

“Let’s address the lack of opportunity or the inequality of opportunity. Let’s address the real problems that are there. And so, I spend a lot of my time working.… to make sure that the laws we recently passed are fully executed, like the Evidence Act. I recently sent a letter to the Justice Department saying: “You now have new tools under the Evidence Act to actually address policing reforms and to actually measure the effectiveness of policing protocols and activities.” I also think there’s so much we can do in the area of Opportunity Zones and Social Impact Bonds in communities to address these needs. 

“Now is the time to reawaken the citizenry to these injustices and to the inequality of opportunity that exists in our free society. Our free enterprise system is the best possible tool to fix and heal these wounds, so that’s the kind of stuff I work on a lot. I’m actually really optimistic and interested and excited about getting on with this work because there’s such a great need.”

Minding the Mission of Opportunity Zones to Revitalize Communities: 

“Jack [Kemp] used to always say you can’t have capitalism without capital. And you can’t have black entrepreneurship in businesses and startups without capital, and this is what I think Opportunity Zones have a great opportunity of doing. One of the things we’re working on at the American Idea Foundation is making sure that all the Opportunity Zone funds being raised and deployed in the country “mind the mission,” which is when we wrote this bill…. we were saying that we have got to make sure that this goes the right way and that this is a tool of revitalization, never gentrification. 

“And so, one of the things we work on it at the American Idea Foundation is to make sure that all this capital that is going to go into these economically depressed areas, whether it’s in Appalachia, rural America, or inner cities, actually revitalizes and empowers the people who are there right now and doesn’t displace them through gentrification. We have all this capital that is being raised and deployed, and what we want to make sure now is that it meets the mission which was to revitalize, to help build entrepreneurship for people to own and start businesses, to get economic growth and equality of opportunity spread into these communities. I really am bullish on this law. 

“I’ve been working with [the University of Notre Dame’s] Lab for Economic Opportunity, which is getting economists to work with charities, to use random clinical trials and evidence and data and analytics to basically make sure that our ways of fighting poverty are actually effective and are actually working. [To make sure] they’re incorporating the right principles and incentives and we actually can make sure that the effort we put through government, through philanthropy, and through private enterprise actually works to help people bring themselves out of poverty and create a sense of upward mobility and create a sense that the American idea is alive and well, and it’s there for everyone.”

Improving Evidence in Policing

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By: AIF Staff

The recent protests surrounding the murder of George Floyd and Rayshard Brooks are the latest and most visible reminders that policing power is one of the most critical responsibilities we give the State in our free society. Its importance cannot be overstated –citizens are unable to go about their daily lives if they are living in fear of violence. And more often than not, police officers are leaders in our communities, who selflessly undertake the vital role of keeping citizens safe from crime and illicit activity. 

The challenges that police officers face while doing their jobs are large, and they are given powers that are commensurate with those challenges. However, with that power comes the expectation that the police will use their power responsibly. 

As the last few weeks have shown, there are many ideas on how to improve policing and how to preserve the trust between the police and the communities they serve. House Democrats have introduced the Justice in Policing Act, Senator Tim Scott and his Republican colleagues have offered the JUSTICE Act, and the President has offered solutions via an Executive Order. These are all positive contributions to a long overdue, and much needed, conversation about how we ensure that our laws are enforced equally and that proper oversight is given to the law enforcement officials in whom we entrust these important responsibilities. Our country has put off having this difficult, but necessary conversation for too long and as a result, countless lives have been lost and meaningful progress has been delayed. 

A critical piece that should not be overlooked in our current discussion about policing reform is the importance of allowing evidence and data to drive improvements in policing strategies. As policymakers look to improve policing operations and reduce preventable abuses of authority, they will need a roadmap to understand what actually works in this space. In order to develop this roadmap, both the Administration and the Congress should build on other programs that have developed a body of evidence around what works, and then, on a bipartisan basis, determine the optimal level and allocation of funding for those programs.

As Congressman Will Hurd said in a recent op-ed: “The way we solve these broader issues isn’t by defunding the police but by ensuring they do better.” The best way to determine if departments are in fact doing better, is by increasing and strengthening the amount of evidence and data related to their work. 

Increasing the utilization of reporting, evidence, and data is not a new concept, and the federal government has successfully done this before. One example to look towards is the Maternal, Infant and Early Childhood Visitation program. This program, created under President Bush, codified under President Obama, and reauthorized under President Trump, provides for a tiered-evidence funding model where new interventions are tested, promising interventions are scaled up, and proven interventions are funded at higher levels. This model has led to the successful funding of nurse-family partnerships and it gives policymakers a template to follow in the pursuit of evidence-based policing strategies.   

As Congress works toward improving policing outcomes, they should create a tiered-funding model at the National Institutes of Justice to identify and fund policing practices that reduce violence and improve officer safety. All levels of government are going to be rolling out new public safety practices or incorporating reforms that have been pushed for years, as governments do so, they should ensure police departments are actually achieving the goals that are being pursued.

To help advance the conversation about compiling better data and evidence in policing, former Speaker Paul Ryan, the President of the American Idea Foundation, sent the following letter to Attorney General William Barr. As Ryan said in the letter: 

“Our nation’s law enforcement officials have one of the most difficult occupations in our society. They are given immense powers to complete those tasks and have a responsibility to uphold the public’s trust by equally applying our laws. In light of this power and responsibility and to improve its efforts, we urge the DOJ to prioritize learning how best to continue guaranteeing the safety of our citizens and law enforcement personnel.”

Without question, we need to act decisively to prevent police officers from abusing their authority and from harming the very citizens that they swore an oath to protect. But as we do this, lawmakers should also push to increase the amount of data and reporting around techniques and strategies and create a repository of good ideas that have proven to work in communities around the country. 

Given the immense responsibility that we place in our law enforcement officers, increasing the amount of evidence and data collected with their efforts will ultimately help the police and their fellow citizens, who they serve and protect, achieve a more equitable system of justice.  

One Community at a Time, Opportunity Zones begin to Germinate

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June 16, 2020

By: AIF Staff

In his “farewell address,” American Idea Foundation President and former Speaker of the House, Paul Ryan noted:

“You all know that finding solutions to help people lift themselves out of poverty is a personal mission for me. I think we have made real progress here in a relatively short time…. We have begun to break this monolith. New opportunity zones, part of tax reform, will bring more investment to distressed communities….

“I believe firmly that solving our poverty challenges once and for all will require not just a great undertaking, but a great rethinking of how we help the most vulnerable among us. It begins with realizing that the best results come from within communities, where solutions are tailored and targeted for people’s needs. This battle will be won soul-to-soul and eye-to-eye.”

In keeping with its mission to advance data-driven solutions that expand economic opportunities, the American Idea Foundation has pushed for the proper development of opportunity zones, which were created as part of the 2017 Tax Cuts and Jobs Act.

As articulated by the Department of Housing and Urban Development, opportunity zones, which can be found in all 50 states and the District of Columbia, are economically distressed census tracts that are eligible for preferential tax treatment. As tax experts, Cesar Conda and Ryan Ellis wrote: There are “42,000 such communities in the United States today…. They are both urban and rural, home to Americans of all races. Poor whites in Appalachia will be beneficiaries of the same Opportunity Zone law as poor blacks in Chicago or poor Indians in South Dakota.”

Opportunity Zones, as designed by the author of the provision, Senator Tim Scott of South Carolina, “incentivize long-term investment in low-income and distressed communities by offering a deferral of capital gains taxes for investors.”

In 2018, Speaker Ryan described the incentives of Opportunity Zones succinctly, saying: “With these opportunity zones, we are essentially offering private investors a set of incentives. The longer you maintain your investment in these areas, the more tax benefits you receive. Right now, we have $6 trillion of unrealized capital that can be deployed to help alleviate poverty in distressed communities and improve people’s lives.”

As Conda and Ellis noted:

“Investors get three big tax benefits by rolling their gains into Opportunity Funds. First, they get tax deferral on the gains they roll in. Currently, that deferral is available through 2026, but if Opportunity Zones are successful there is every reason to believe Congress will extend this. Second, investors can “step up” their basis in their deferred capital gain by up to 15 percent provided they keep the money in an Opportunity Fund for at least seven years. Finally, an investor in an Opportunity Fund asset who holds the investment for at least 10 years pays a 0 percent capital gains tax upon sale, to the extent the gains are derived from the Opportunity Zone asset.

The promise of opportunity zones is that they will draw investment to areas around the country that need it most, and that investment will lead to rejuvenation and revitalization. At their best, opportunity zones will be locally-driven and serve as tools of reclamation rather than gentrification.

As the Economic Innovation Group noted: “Capital alone is not a strategy…. Going forward, state and local leaders are responsible for devising the strategies that will take these few new lines of the tax code and turn them into something that unlocks opportunity for local residents and entrepreneurs.”

The roll-out of opportunity zones has been deliberate, as these projects require relationships with local, state, and federal actors, but all across America, there is reason for hope that these zones will help communities rise up in unique ways. Forbes, in conjunction with the Sorensen Impact Center, highlighted a collection of the most promising projects underway across the United States.

Some other examples of how Opportunity Zones are improving communities around the country and allowing people to recognize their version of the American Dream include:

–          Paterson, New Jersey: As columnist Chris Slevin said, “New Jersey has 169 Opportunity Zones, which carry an average poverty rate of 25 percent and a median family income of $48,000, on average. About 738,000 New Jerseyans live in these zones. In many of these communities, the ongoing challenge of redeveloping brownfield sites has made it harder to attract capital in recent decades.”

But the incentives provided by Opportunity Zones are attracting investors who are able to clean up the brownfields and environmentally-damaged land, allowing for further community development to take hold. As Democrat Senator Cory Booker said: “I see really the perspective from New Jersey and I’m seeing a lot of different groups: impact investors, people that have a social mission. There are some businesses that have a charitable foundation and (are) looking for ways to create a multiplier effect with their investment, which is exciting.”

New Jersey’s business and government leaders have made sure to take a step-by-step approach to developing opportunity zones, remembering that they are designed to thoughtfully rejuvenate communities with sustained investment and care.

–          Provo, Utah: In announcing the state’s initial Opportunity Zones, Governor Gary Herbert described the program’s goals as “economic prosperity for all Utahns. Opportunity Zones will go a long way in helping to support growth in economically-distressed areas throughout the state. By working with these communities, the zones will attract more businesses and new investment.”

HUD Secretary Ben Carson said recently that Utah’s Opportunity Zones, “look like the 22nd century.”  A local business owner in Provo noted, “the opportunity zone designation did serve as a sort of accelerant when it came to finding outside investors for the companies, most of which simply move to different buildings on the same large campus that Hall Labs exists on, so they continue to benefit Provo’s economy.” 

As the Provo Daily Herald said: “If you are a small business owner, you are someone who … could take advantage of this … we’re trying to build this platform to not only provide temporal assistance to those who need it, but really match them with potential investors should they have a project that they feel warrants it.”

–          Baltimore, Maryland: In the Charm City, the opportunity zones were selected based on need and around anchor projects that could serve as hubs for revitalization. One project, features a concert hall amid “a stretch of industrial buildings and vacant lots on Russell Street that the city wants to transform into an entertainment district.” As former Baltimore Mayor Catherine Pugh detailed at a Kemp Forum on Opportunity Zones, the city is more ready than any other to begin developing these promising parts of the city.

–          Erie, Pennsylvania: As the Wall Street Journal noted, “Erie was one of the first cities to jump on the federal-opportunity zone program, creating a 58-page prospectus and identifying a dozen “shovel ready” projects, including the renovation of a 133-unit downtown hotel. Redevelopment would have happened with or without the opportunity-zone program, city leaders say, but the tax breaks will speed the process.” Erie’s promise is receiving further recognition, as it received one of the Forbes’ Opportunity Zone awards.

–          Brooklyn Center, Minnesota: The Brooklyns Building is owned by the city’s Economic Development Authority and the incubator is going to focus on helping minority- and immigrant-owned startup companies. The project is designed to grow with the community’s involvement, and it was recently recognized by the Minnesota Opportunity Collective for its potential.

The rollout of Opportunity Zones has been accompanied by passionate debate, which is a good thing. It ensures that policymakers at the local, state, and federal level will work to design projects as the law intended. Because evidence and data should help drive decisions, it was encouraging to see a bipartisan group of Senators introduce legislation strengthening the reporting requirements for opportunity zones. As Senator Todd Young of Indiana said upon its introduction, “Our bill will help strengthen Opportunity Zones by increasing transparency within the program and creating metrics to measure and improve on its success.”

The promise of Opportunity Zones is directly connected to local entrepreneurs working within their communities and developing synergistic relationships with elected officials. As communities build themselves up one project at a time, lives can be improved and dreams can be realized in a sustainable and bottom-up way. As opportunity zones continue to germinate, the American Idea Foundation will ensure they comport with the original spirit and intent of the law.