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Reason Foundation Issues Commentary: California Assembly Bill 1383 Would Drive Up Costs for Local Governments
LOS ANGELES, California, July 18 -- The Reason Foundation issued the following commentary by Managing Director Zachary Christensen and policy analyst Steven Gassenberger, both from Pension Integrity Project:
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California Assembly Bill 1383 would drive up costs for local governments
Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers.
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The nation's largest public pension plan, the California Public Employees' Retirement System (CalPERS), continues to be a major driver of the state's growth in spending. ... Show Full Article LOS ANGELES, California, July 18 -- The Reason Foundation issued the following commentary by Managing Director Zachary Christensen and policy analyst Steven Gassenberger, both from Pension Integrity Project: * * * California Assembly Bill 1383 would drive up costs for local governments Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers. - The nation's largest public pension plan, the California Public Employees' Retirement System (CalPERS), continues to be a major driver of the state's growth in spending.In 2025, taxpayers via government employers (local governments, school districts, and the state) paid $23.4 billion to CalPERS, most of which went to pay for the system's growing unfunded liabilities and benefits promised to workers and retirees. While the Public Employees' Pension Reform Act (PEPRA) has helped slow the growth of the state's pension-related costs since its passage in 2012, the state is still decades away from fully funding pension benefits already promised.
Assembly Bill 1383 grants new benefits and undermines PEPRA
California lawmakers are currently considering Assembly Bill 1383, which would undermine crucial PEPRA reforms. The bill would grant an unfunded pension benefit increase for higher earners by expanding the definition of pensionable compensation. It would also remove the cost-sharing limits in PEPRA that protect taxpayers from runaway costs. AB 1383 would give public safety workers special exceptions, lowering their retirement age and granting them a higher level of pension benefits. Like the disastrous 1999 public pension benefit increase governments are still trying to pay for, this law would add large costs that could easily balloon if the economy or pension system's investments experience a downturn.
AB 1383 could cost local governments an additional $14.5 billion
Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers. Reason Foundation's modeling finds the bill could add $9.3 billion in additional costs over the next 30 years and up to $14.5 billion with expected recessions or market downturns. The largest source of new costs (86%) would come from changes to the pensionable compensation cap, which would raise the salary used to calculate retirement benefits.
Bottom line
California's road to recovery from the legislative mistakes of the 1990s and major market losses in the 2000s remains long and ongoing. Undermining important guardrails set in place by the bipartisan PEPRA reforms would add significant costs to already-strapped local governments and taxpayers. Instead of adding an additional $14.5 billion in potential public pension costs, policymakers should stay the course set by PEPRA and work to further reduce the state's exposure to pension debt.
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Zachary Christensen is a managing director of Reason Foundation's Pension Integrity Project.
Steven Gassenberger is a policy analyst with Reason Foundation's Pension Integrity Project.
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Original text here: https://reason.org/backgrounder/california-assembly-bill-1383-would-drive-up-costs-for-local-governments/
* * *
California Assembly Bill 1383 would drive up costs for local governments
Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers.
-
The nation's largest public pension plan, the California Public Employees' Retirement System (CalPERS), continues to be a major driver of the state's growth in spending. ... Show Full Article LOS ANGELES, California, July 18 -- The Reason Foundation issued the following commentary by Managing Director Zachary Christensen and policy analyst Steven Gassenberger, both from Pension Integrity Project: * * * California Assembly Bill 1383 would drive up costs for local governments Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers. - The nation's largest public pension plan, the California Public Employees' Retirement System (CalPERS), continues to be a major driver of the state's growth in spending.In 2025, taxpayers via government employers (local governments, school districts, and the state) paid $23.4 billion to CalPERS, most of which went to pay for the system's growing unfunded liabilities and benefits promised to workers and retirees. While the Public Employees' Pension Reform Act (PEPRA) has helped slow the growth of the state's pension-related costs since its passage in 2012, the state is still decades away from fully funding pension benefits already promised.
Assembly Bill 1383 grants new benefits and undermines PEPRA
California lawmakers are currently considering Assembly Bill 1383, which would undermine crucial PEPRA reforms. The bill would grant an unfunded pension benefit increase for higher earners by expanding the definition of pensionable compensation. It would also remove the cost-sharing limits in PEPRA that protect taxpayers from runaway costs. AB 1383 would give public safety workers special exceptions, lowering their retirement age and granting them a higher level of pension benefits. Like the disastrous 1999 public pension benefit increase governments are still trying to pay for, this law would add large costs that could easily balloon if the economy or pension system's investments experience a downturn.
AB 1383 could cost local governments an additional $14.5 billion
Actuarial analysis by CalPERS indicates that AB 1383 would add $4.8 billion in long-term costs, borne by local governments and taxpayers. Reason Foundation's modeling finds the bill could add $9.3 billion in additional costs over the next 30 years and up to $14.5 billion with expected recessions or market downturns. The largest source of new costs (86%) would come from changes to the pensionable compensation cap, which would raise the salary used to calculate retirement benefits.
Bottom line
California's road to recovery from the legislative mistakes of the 1990s and major market losses in the 2000s remains long and ongoing. Undermining important guardrails set in place by the bipartisan PEPRA reforms would add significant costs to already-strapped local governments and taxpayers. Instead of adding an additional $14.5 billion in potential public pension costs, policymakers should stay the course set by PEPRA and work to further reduce the state's exposure to pension debt.
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Zachary Christensen is a managing director of Reason Foundation's Pension Integrity Project.
Steven Gassenberger is a policy analyst with Reason Foundation's Pension Integrity Project.
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Original text here: https://reason.org/backgrounder/california-assembly-bill-1383-would-drive-up-costs-for-local-governments/
WLF Asks Third Circuit to Affirm Dismissal of ERISA Suit Over Health Plan Drug Prices
WASHINGTON, July 17 [Category: Law/Legal] -- The Washington Legal Foundation issued the following news release:
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WLF Asks Third Circuit to Affirm Dismissal of ERISA Suit Over Health Plan Drug Prices
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"ERISA was written to encourage employers to offer benefits, not to punish them for delivering the coverage they promised."
-Cory L. Andrews, WLF General Counsel & Vice President of litigation
Click here for WLF's brief.
(Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Third Circuit to affirm the dismissal of an Employee Retirement Income ... Show Full Article WASHINGTON, July 17 [Category: Law/Legal] -- The Washington Legal Foundation issued the following news release: * * * WLF Asks Third Circuit to Affirm Dismissal of ERISA Suit Over Health Plan Drug Prices * "ERISA was written to encourage employers to offer benefits, not to punish them for delivering the coverage they promised." -Cory L. Andrews, WLF General Counsel & Vice President of litigation Click here for WLF's brief. (Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Third Circuit to affirm the dismissal of an Employee Retirement IncomeSecurity Act (ERISA) class action that challenges prescription drug prices inside a self-funded health plan. In its amicus brief, WLF contends that a participant who received every benefit her plan promised suffers no concrete injury from wishing one line item had cost less. The National Association of Manufacturers joined WLF on the brief.
The case arises from Ann Lewandowski's suit alleging that Johnson & Johnson breached its ERISA fiduciary duties by failing to negotiate a harder bargain with its pharmacy benefit manager for certain generic drugs. She claims this conduct caused her roughly $210 in excess out-of-pocket costs in a year when the plan spent more than $200,000 on her medical and pharmacy care. The district court dismissed the claims for lack of Article III standing, holding that her claims were too speculative given the plan's structure and the sponsor's discretion over contribution rates.
In its amicus brief, WLF argues that Lewandowski received the full bundle of benefits her plan promised, so the price of any single drug inside that bundle cannot constitute a standalone pocketbook injury. WLF further explains that exposing plan sponsors to liability for every formulary pricing decision would impose a litigation tax that undermines ERISA's core purpose of encouraging employers to offer coverage. WLF urges the Third Circuit to affirm the district court's judgment and protect employers who sponsor self-funded health plans.
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Original text here: https://www.wlf.org/2026/07/17/communicating/wlf-asks-third-circuit-to-affirm-dismissal-of-erisa-suit-over-health-plan-drug-prices/
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WLF Asks Third Circuit to Affirm Dismissal of ERISA Suit Over Health Plan Drug Prices
*
"ERISA was written to encourage employers to offer benefits, not to punish them for delivering the coverage they promised."
-Cory L. Andrews, WLF General Counsel & Vice President of litigation
Click here for WLF's brief.
(Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Third Circuit to affirm the dismissal of an Employee Retirement Income ... Show Full Article WASHINGTON, July 17 [Category: Law/Legal] -- The Washington Legal Foundation issued the following news release: * * * WLF Asks Third Circuit to Affirm Dismissal of ERISA Suit Over Health Plan Drug Prices * "ERISA was written to encourage employers to offer benefits, not to punish them for delivering the coverage they promised." -Cory L. Andrews, WLF General Counsel & Vice President of litigation Click here for WLF's brief. (Washington, DC)-Washington Legal Foundation (WLF) today urged the U.S. Court of Appeals for the Third Circuit to affirm the dismissal of an Employee Retirement IncomeSecurity Act (ERISA) class action that challenges prescription drug prices inside a self-funded health plan. In its amicus brief, WLF contends that a participant who received every benefit her plan promised suffers no concrete injury from wishing one line item had cost less. The National Association of Manufacturers joined WLF on the brief.
The case arises from Ann Lewandowski's suit alleging that Johnson & Johnson breached its ERISA fiduciary duties by failing to negotiate a harder bargain with its pharmacy benefit manager for certain generic drugs. She claims this conduct caused her roughly $210 in excess out-of-pocket costs in a year when the plan spent more than $200,000 on her medical and pharmacy care. The district court dismissed the claims for lack of Article III standing, holding that her claims were too speculative given the plan's structure and the sponsor's discretion over contribution rates.
In its amicus brief, WLF argues that Lewandowski received the full bundle of benefits her plan promised, so the price of any single drug inside that bundle cannot constitute a standalone pocketbook injury. WLF further explains that exposing plan sponsors to liability for every formulary pricing decision would impose a litigation tax that undermines ERISA's core purpose of encouraging employers to offer coverage. WLF urges the Third Circuit to affirm the district court's judgment and protect employers who sponsor self-funded health plans.
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Original text here: https://www.wlf.org/2026/07/17/communicating/wlf-asks-third-circuit-to-affirm-dismissal-of-erisa-suit-over-health-plan-drug-prices/
Royal Society of Edinburgh Announces Program Details for Scotland's Festival of Knowledge
EDINBURGH, Scotland, July 17 -- The Royal Society of Edinburgh issued the following news on July 16, 2026:
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Curious 2026 festival launches
The great debate about lithium-ion batteries, the future of democracy, true crime investigations, Scottish mosquitoes and the artistry of stained glass at Dunfermline Abbey will all feature at a free festival this September.
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Today, the Royal Society of Edinburgh has announced its programme for Scotland's festival of knowledge, which will include luminaires such as political scientist Sir John Curtice and award-winning crime writer Louise Welsh.
Dr ... Show Full Article EDINBURGH, Scotland, July 17 -- The Royal Society of Edinburgh issued the following news on July 16, 2026: * * * Curious 2026 festival launches The great debate about lithium-ion batteries, the future of democracy, true crime investigations, Scottish mosquitoes and the artistry of stained glass at Dunfermline Abbey will all feature at a free festival this September. - Today, the Royal Society of Edinburgh has announced its programme for Scotland's festival of knowledge, which will include luminaires such as political scientist Sir John Curtice and award-winning crime writer Louise Welsh. DrAmer Syed of the University of Edinburgh will lead a hands-on workshop that will give people a new perspective on lithium-ion batteries as they become increasingly common place in our everyday lives and in industry.
Dr Syed said: "These batteries are becoming increasingly common, and while we hear a lot about them as they are used in a wide range of places from your Bluetooth earphones to electric vehicles, it is important that people understand what goes into their design and manufacture.
"This event will give people a great opportunity to get to grips with the global supply chain, all the elements that are used in making these batteries and packs for electric vehicles, their environmental impact, and to understand the state-of-the-art of these systems that are an important part of our renewable energy landscape."
Vivienne Kelly, artist and PhD student at Heriot-Watt University, will host a workshop on the science and conservation of stained-glass at Dunfermline Abbey along with Dr Craig Kennedy. The pair will do a live demonstration of x-ray fluorescence (XRF), a technique used to analyse how glass is given its colour.
Vivienne and Craig will explain the challenges involved in conservation of stained-glass, using the curious case of the fragments of the stained-glass Margaret Window that were taken from - and then anonymously returned to - Dunfermline Abbey last year.
She said: "It's important that people have the opportunity to engage with stained glass heritage, and the mystery of the Dunfermline Abbey fragments gives us the chance to unravel their secrets together.
"The event will be a unique look not only at the stained glass, but at the research techniques used by academics and practitioners, and how individuals and communities can interact with heritage through a new lens."
They will also provide insight into the skills, training and careers involved in heritage research and conservation, and how communities and building owners can play a vital role for Scotland's art and culture.
Each year, the RSE's Curious festival of knowledge is a perfect opportunity for any person to dive into a field of exploration or artistic endeavour and satisfy their curiosity and thirst for knowledge.
Professor Heather Ferguson will host an event on the complex issue of mosquitoes in Scotland. The talk will highlight findings from the Mosquito Scotland project, which is the first to comprehensively investigate the distribution, ecology and potential risk of disease transmission. Professor Ferguson will also hold a question-and-answer session about her research.
Climate change is increasing the risk of mosquito-borne diseases in northern Europe, both through enabling the spread of tropical mosquitoes northwards, and by increasing the potential of native mosquito species to spread emerging pathogens. This raises important questions about Scotland's mosquitoes and whether they could pose a risk to human or animal health under warming conditions.
Professor Dee Heddon FRSE, Fellow of the RSE and member of its public engagement committee, said: "I am proud to reveal the programme for this year's Curious festival. Each year the team pull out all the stops to get a whole range of experts to join us and engage with the public, and this year is superb. The sheer breadth of knowledge they can share could fill entire libraries.
* * *
"For anyone curious to learn about something new, or a passion they have held for years, you can learn - free - with the people who know their subjects best, through this series of workshops, talks, film screenings and creative walking tours.
"It is such a privilege to be able to offer this free festival to the people of Scotland. The only question now is: what are you curious about?"
* * *
Also on the programme are writer Louise Welsh FRSE with architect Jude Barber FRSE. Louise and Jude will be giving a talk on their ongoing citizen investigation podcast Who Owns the Clyde? a long-running project to pool the viewpoints of Clydeside citizens, architects, ecologists and activists to explore the history, cultural significance, stewardship and potential future for the River Clyde.
Professor Sir John Curtice FRSE, Professor Ailsa Henderson FRSE and Professor Chris Carman will also present an event to assess the future of Scottish democracy in the wake of the 2026 Holyrood election. This event will unpack what happened, why, and what it means for Scottish democracy.
Tickets are available to book from Thursday 23 July at the RSE's website - https://rse.org.uk/curious/
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Original text here: https://rse.org.uk/curious-2026-festival-launches/
* * *
Curious 2026 festival launches
The great debate about lithium-ion batteries, the future of democracy, true crime investigations, Scottish mosquitoes and the artistry of stained glass at Dunfermline Abbey will all feature at a free festival this September.
-
Today, the Royal Society of Edinburgh has announced its programme for Scotland's festival of knowledge, which will include luminaires such as political scientist Sir John Curtice and award-winning crime writer Louise Welsh.
Dr ... Show Full Article EDINBURGH, Scotland, July 17 -- The Royal Society of Edinburgh issued the following news on July 16, 2026: * * * Curious 2026 festival launches The great debate about lithium-ion batteries, the future of democracy, true crime investigations, Scottish mosquitoes and the artistry of stained glass at Dunfermline Abbey will all feature at a free festival this September. - Today, the Royal Society of Edinburgh has announced its programme for Scotland's festival of knowledge, which will include luminaires such as political scientist Sir John Curtice and award-winning crime writer Louise Welsh. DrAmer Syed of the University of Edinburgh will lead a hands-on workshop that will give people a new perspective on lithium-ion batteries as they become increasingly common place in our everyday lives and in industry.
Dr Syed said: "These batteries are becoming increasingly common, and while we hear a lot about them as they are used in a wide range of places from your Bluetooth earphones to electric vehicles, it is important that people understand what goes into their design and manufacture.
"This event will give people a great opportunity to get to grips with the global supply chain, all the elements that are used in making these batteries and packs for electric vehicles, their environmental impact, and to understand the state-of-the-art of these systems that are an important part of our renewable energy landscape."
Vivienne Kelly, artist and PhD student at Heriot-Watt University, will host a workshop on the science and conservation of stained-glass at Dunfermline Abbey along with Dr Craig Kennedy. The pair will do a live demonstration of x-ray fluorescence (XRF), a technique used to analyse how glass is given its colour.
Vivienne and Craig will explain the challenges involved in conservation of stained-glass, using the curious case of the fragments of the stained-glass Margaret Window that were taken from - and then anonymously returned to - Dunfermline Abbey last year.
She said: "It's important that people have the opportunity to engage with stained glass heritage, and the mystery of the Dunfermline Abbey fragments gives us the chance to unravel their secrets together.
"The event will be a unique look not only at the stained glass, but at the research techniques used by academics and practitioners, and how individuals and communities can interact with heritage through a new lens."
They will also provide insight into the skills, training and careers involved in heritage research and conservation, and how communities and building owners can play a vital role for Scotland's art and culture.
Each year, the RSE's Curious festival of knowledge is a perfect opportunity for any person to dive into a field of exploration or artistic endeavour and satisfy their curiosity and thirst for knowledge.
Professor Heather Ferguson will host an event on the complex issue of mosquitoes in Scotland. The talk will highlight findings from the Mosquito Scotland project, which is the first to comprehensively investigate the distribution, ecology and potential risk of disease transmission. Professor Ferguson will also hold a question-and-answer session about her research.
Climate change is increasing the risk of mosquito-borne diseases in northern Europe, both through enabling the spread of tropical mosquitoes northwards, and by increasing the potential of native mosquito species to spread emerging pathogens. This raises important questions about Scotland's mosquitoes and whether they could pose a risk to human or animal health under warming conditions.
Professor Dee Heddon FRSE, Fellow of the RSE and member of its public engagement committee, said: "I am proud to reveal the programme for this year's Curious festival. Each year the team pull out all the stops to get a whole range of experts to join us and engage with the public, and this year is superb. The sheer breadth of knowledge they can share could fill entire libraries.
* * *
"For anyone curious to learn about something new, or a passion they have held for years, you can learn - free - with the people who know their subjects best, through this series of workshops, talks, film screenings and creative walking tours.
"It is such a privilege to be able to offer this free festival to the people of Scotland. The only question now is: what are you curious about?"
* * *
Also on the programme are writer Louise Welsh FRSE with architect Jude Barber FRSE. Louise and Jude will be giving a talk on their ongoing citizen investigation podcast Who Owns the Clyde? a long-running project to pool the viewpoints of Clydeside citizens, architects, ecologists and activists to explore the history, cultural significance, stewardship and potential future for the River Clyde.
Professor Sir John Curtice FRSE, Professor Ailsa Henderson FRSE and Professor Chris Carman will also present an event to assess the future of Scottish democracy in the wake of the 2026 Holyrood election. This event will unpack what happened, why, and what it means for Scottish democracy.
Tickets are available to book from Thursday 23 July at the RSE's website - https://rse.org.uk/curious/
* * *
Original text here: https://rse.org.uk/curious-2026-festival-launches/
Rockefeller Foundation: Zero Gap Fund's Catalytic Capital Keeps Multiplying - $30M Sustains $1.05B for the UN Sustainable Development Goals
NEW YORK, July 17 (TNSrpt) -- The Rockefeller Foundation posted the following news release on July 16, 2026:
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Zero Gap Fund's Catalytic Capital Keeps Multiplying: $30M Sustains $1.05B for the UN Sustainable Development Goals
The Rockefeller Foundation-led impact investing collaboration with the John D. and Catherine T. MacArthur Foundation releases its 7th annual report, showing impact investing remains a critical bridge for advancing the UN Sustainable Development Goals amid cuts to official development assistance.
Since 2019, $30 million in catalytic capital has mobilized $1.05 billion ... Show Full Article NEW YORK, July 17 (TNSrpt) -- The Rockefeller Foundation posted the following news release on July 16, 2026: * * * Zero Gap Fund's Catalytic Capital Keeps Multiplying: $30M Sustains $1.05B for the UN Sustainable Development Goals The Rockefeller Foundation-led impact investing collaboration with the John D. and Catherine T. MacArthur Foundation releases its 7th annual report, showing impact investing remains a critical bridge for advancing the UN Sustainable Development Goals amid cuts to official development assistance. Since 2019, $30 million in catalytic capital has mobilized $1.05 billionin private investment -- a 35x leverage ratio.
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Amid sharp cuts to development assistance over the past year, The Rockefeller Foundation today released its annual Zero Gap Fund: 2025 State of the Portfolio report, highlighting the critical role of catalytic capital in addressing the world's most pressing challenges. As of December 2025, the Zero Gap Fund (ZGF or the Fund) had facilitated the mobilization of more than $1.05 billion -- about a 35x leverage -- in private finance across 12 high-impact investments spanning food and nutrition security, climate adaptation, healthcare access, U.S. jobs and more. To date, the Fund has fully committed $30 million, $28 million of which has been deployed, with four of its investments exited.
The Zero Gap Fund was launched in 2019 in partnership with the John D. and Catherine T. MacArthur Foundation to promote investment in scalable and innovative impact-driven investment solutions. The fund deploys patient, risk-tolerant, and flexible capital into promising financial strategies and mechanisms aimed at increasing large-scale private investment to advance the 17 UN Sustainable Development Goals (SDGs), which were established in 2015 to bring countries together to end poverty, protect the planet, and ensure global peace and prosperity by 2030.
"The Zero Gap Fund: 2025 State of the Portfolio report reinforces an important lesson: strategic, catalytic capital can unlock resources far beyond its size to empower vulnerable people," said Slav Gatchev, Vice President of Innovative Finance at The Rockefeller Foundation. "At a time when many countries are slashing their foreign assistance budgets, the Zero Gap Fund shows how philanthropy and private capital can work together to create job opportunities, shore up climate resilience, and improve lives around the world. Building on our long history in impact investing, The Rockefeller Foundation is committed to working with partners to continue and expand this important work."
"The Zero Gap Fund continues to demonstrate the power of catalytic capital to drive impact across sectors and geographies," said Debra Schwartz, Managing Director for Impact Investments at MacArthur. "The fund's innovative and scaled co-investment model allows more capital to be deployed rapidly and efficiently to impact-driven enterprises and funds around the world."
ZGF was created to help close the financing gap to achieve the SDGs, which at the Fund's creation was estimated at $2.5 trillion annually. The gap persists because public budgets, foreign aid, and developing country revenues cannot cover the need, preventing countries with fewer resources to invest in education, healthcare, renewable energy, or social protection. Last year, that gap widened significantly, now totaling more than $4 trillion annually, according to recent estimates from the United Nations.
Against this challenging backdrop, the results in this year's Zero Gap Fund: 2025 State of the Portfolio show that impact investing remains a much-needed force for progress across a range of impact areas and that the ZGF offers a replicable model for closing the gap at scale. Through investments focused on underserved markets and communities, ZGF shows that private capital can play an important role in achieving the SDGs and help lift up millions of people in the United States and around the world.
ZGF's eight open investments span eight regions, with several funds working across multiple geographies at once. Key examples through December 2025 include:
* LeapFrog's Emerging Consumer Fund III (Fund III) is a growth equity fund serving low-income consumers in Asia and Africa, incorporating a blended finance insurance product to mitigate tail-end risks. Fund III has supported more than 173,000 jobs and reached 361 million consumers - 345 million through financial services and 16 million healthcare consumers.
* Lightsmith's CRAFT facility focuses on climate adaptation, mobilizing capital for innovative companies delivering technologies that build community resilience. CRAFT has helped provide 28 million liters of clean water and helped reduce 2.7 million metric tons of CO2e.
* Founders First Capital Partners (FFCP) is an alternative credit provider that uses revenue-based financing to grow underinvested service-based companies. FFCP has deployed $19.5 million in capital across 68 loans.
* Apis & Heritage's Legacy Fund I finances the conversion of companies with majority low- and moderate-income workforces into employee-owned businesses using an employee-led buyout structure. Legacy Fund I has helped transition 6 businesses into 100% employee-owned, leading to more than 1,500 new employee owners.
* Seedstars International Ventures II (Fund II) invests in seed-stage tech-enabled startups across emerging and frontier markets and helps them scale. Fund II has committed $13.7 million across 56 companies, helping create more than 1,500 net new full-time jobs.
* Horizon Capital Growth Fund IV (HCGF IV) invests in innovative, export-oriented asset-light technology companies in Ukraine that are more resilient to volatile macro environments. HCGF IV has invested more than $120 million across six Ukraine-based companies, supporting more than 5,100 jobs.
* Blue Forest's FRB Catalyst Facility leverages the public-private partnership structure of the Forest Resilience Bond to create a pooled, revolving investment facility that mobilizes capital to accelerate the financing of critical ecological restoration projects. FRB Catalyst Facility has begun protection efforts in 10 locations helping protect more than 31,000 acres of terrestrial ecosystems.
* Trailhead Capital Regeneration Fund I invests in early-stage businesses providing innovative, scalable, tech-enabled solutions for regenerative food and agriculture. Regeneration Fund I has invested in 30 companies, impacting 42.3 million acres of land and counting.
The Rockefeller Foundation has long recognized the importance of mobilizing private sector capital for public good. It played a pivotal role in the origin of the impact investing field in 2007. That next year, the Foundation brought the impact investing industry into the mainstream by launching a $38 million initiative, Harnessing the Power of Impact Investing, which has since evolved into the Foundation's Innovative Finance program. By 2015, the Innovative Finance program created the Zero Gap grant portfolio to provide seed funding to address the world's most pressing challenges, as defined by the UN Sustainable Development Goals (SDGs). Today, The Rockefeller Foundation's Innovative Finance team manages $100 million in active Program Related Investment commitments and has provided a total of $65 million of grant funding across the Zero Gap portfolio and climate finance.
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About The Rockefeller Foundation
Investing $30 billion over the last 113 years to promote the well-being of humanity, The Rockefeller Foundation is a pioneering philanthropy built on unlikely partnerships and innovative solutions that deliver measurable results for people in the United States and around the world, including in association with RF Catalytic Capital Inc (RFCC). We leverage scientific breakthroughs, artificial intelligence, and new technologies to make big bets across energy, food, health, and finance. For more information, follow us on LinkedIn @the-rockefeller-foundation, X @RockefellerFdn, Instagram @rockefellerfdn, and YouTube @rockefellerfound, and sign up for our newsletter at www.rockefellerfoundation.org/subscribe.
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About the John D. and Catherine T. MacArthur Foundation
The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions, and influential networks building a more just, verdant, and peaceful world. MacArthur's Impact Investment program is working to build the field of impact investing and provide catalytic capital to address social and environmental challenges around the world. To demonstrate the power of catalytic capital and to expand its use, MacArthur developed the Catalytic Capital Consortium, an initiative supported by a dozen philanthropic leaders including The Rockefeller Foundation and Omidyar Network. For more information, sign up for MacArthur's newsletter and follow us on LinkedIn.
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REPORT: https://www.rockefellerfoundation.org/wp-content/uploads/2026/07/Zero-Gap-Fund-2025-State-of-the-Portfolio-Report-Final.pdf
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Original text here: https://www.rockefellerfoundation.org/news/zero-gap-funds-catalytic-capital-multiplying-30m-sustains-1-05b-un-sustainable-development-goals/
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Zero Gap Fund's Catalytic Capital Keeps Multiplying: $30M Sustains $1.05B for the UN Sustainable Development Goals
The Rockefeller Foundation-led impact investing collaboration with the John D. and Catherine T. MacArthur Foundation releases its 7th annual report, showing impact investing remains a critical bridge for advancing the UN Sustainable Development Goals amid cuts to official development assistance.
Since 2019, $30 million in catalytic capital has mobilized $1.05 billion ... Show Full Article NEW YORK, July 17 (TNSrpt) -- The Rockefeller Foundation posted the following news release on July 16, 2026: * * * Zero Gap Fund's Catalytic Capital Keeps Multiplying: $30M Sustains $1.05B for the UN Sustainable Development Goals The Rockefeller Foundation-led impact investing collaboration with the John D. and Catherine T. MacArthur Foundation releases its 7th annual report, showing impact investing remains a critical bridge for advancing the UN Sustainable Development Goals amid cuts to official development assistance. Since 2019, $30 million in catalytic capital has mobilized $1.05 billionin private investment -- a 35x leverage ratio.
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Amid sharp cuts to development assistance over the past year, The Rockefeller Foundation today released its annual Zero Gap Fund: 2025 State of the Portfolio report, highlighting the critical role of catalytic capital in addressing the world's most pressing challenges. As of December 2025, the Zero Gap Fund (ZGF or the Fund) had facilitated the mobilization of more than $1.05 billion -- about a 35x leverage -- in private finance across 12 high-impact investments spanning food and nutrition security, climate adaptation, healthcare access, U.S. jobs and more. To date, the Fund has fully committed $30 million, $28 million of which has been deployed, with four of its investments exited.
The Zero Gap Fund was launched in 2019 in partnership with the John D. and Catherine T. MacArthur Foundation to promote investment in scalable and innovative impact-driven investment solutions. The fund deploys patient, risk-tolerant, and flexible capital into promising financial strategies and mechanisms aimed at increasing large-scale private investment to advance the 17 UN Sustainable Development Goals (SDGs), which were established in 2015 to bring countries together to end poverty, protect the planet, and ensure global peace and prosperity by 2030.
"The Zero Gap Fund: 2025 State of the Portfolio report reinforces an important lesson: strategic, catalytic capital can unlock resources far beyond its size to empower vulnerable people," said Slav Gatchev, Vice President of Innovative Finance at The Rockefeller Foundation. "At a time when many countries are slashing their foreign assistance budgets, the Zero Gap Fund shows how philanthropy and private capital can work together to create job opportunities, shore up climate resilience, and improve lives around the world. Building on our long history in impact investing, The Rockefeller Foundation is committed to working with partners to continue and expand this important work."
"The Zero Gap Fund continues to demonstrate the power of catalytic capital to drive impact across sectors and geographies," said Debra Schwartz, Managing Director for Impact Investments at MacArthur. "The fund's innovative and scaled co-investment model allows more capital to be deployed rapidly and efficiently to impact-driven enterprises and funds around the world."
ZGF was created to help close the financing gap to achieve the SDGs, which at the Fund's creation was estimated at $2.5 trillion annually. The gap persists because public budgets, foreign aid, and developing country revenues cannot cover the need, preventing countries with fewer resources to invest in education, healthcare, renewable energy, or social protection. Last year, that gap widened significantly, now totaling more than $4 trillion annually, according to recent estimates from the United Nations.
Against this challenging backdrop, the results in this year's Zero Gap Fund: 2025 State of the Portfolio show that impact investing remains a much-needed force for progress across a range of impact areas and that the ZGF offers a replicable model for closing the gap at scale. Through investments focused on underserved markets and communities, ZGF shows that private capital can play an important role in achieving the SDGs and help lift up millions of people in the United States and around the world.
ZGF's eight open investments span eight regions, with several funds working across multiple geographies at once. Key examples through December 2025 include:
* LeapFrog's Emerging Consumer Fund III (Fund III) is a growth equity fund serving low-income consumers in Asia and Africa, incorporating a blended finance insurance product to mitigate tail-end risks. Fund III has supported more than 173,000 jobs and reached 361 million consumers - 345 million through financial services and 16 million healthcare consumers.
* Lightsmith's CRAFT facility focuses on climate adaptation, mobilizing capital for innovative companies delivering technologies that build community resilience. CRAFT has helped provide 28 million liters of clean water and helped reduce 2.7 million metric tons of CO2e.
* Founders First Capital Partners (FFCP) is an alternative credit provider that uses revenue-based financing to grow underinvested service-based companies. FFCP has deployed $19.5 million in capital across 68 loans.
* Apis & Heritage's Legacy Fund I finances the conversion of companies with majority low- and moderate-income workforces into employee-owned businesses using an employee-led buyout structure. Legacy Fund I has helped transition 6 businesses into 100% employee-owned, leading to more than 1,500 new employee owners.
* Seedstars International Ventures II (Fund II) invests in seed-stage tech-enabled startups across emerging and frontier markets and helps them scale. Fund II has committed $13.7 million across 56 companies, helping create more than 1,500 net new full-time jobs.
* Horizon Capital Growth Fund IV (HCGF IV) invests in innovative, export-oriented asset-light technology companies in Ukraine that are more resilient to volatile macro environments. HCGF IV has invested more than $120 million across six Ukraine-based companies, supporting more than 5,100 jobs.
* Blue Forest's FRB Catalyst Facility leverages the public-private partnership structure of the Forest Resilience Bond to create a pooled, revolving investment facility that mobilizes capital to accelerate the financing of critical ecological restoration projects. FRB Catalyst Facility has begun protection efforts in 10 locations helping protect more than 31,000 acres of terrestrial ecosystems.
* Trailhead Capital Regeneration Fund I invests in early-stage businesses providing innovative, scalable, tech-enabled solutions for regenerative food and agriculture. Regeneration Fund I has invested in 30 companies, impacting 42.3 million acres of land and counting.
The Rockefeller Foundation has long recognized the importance of mobilizing private sector capital for public good. It played a pivotal role in the origin of the impact investing field in 2007. That next year, the Foundation brought the impact investing industry into the mainstream by launching a $38 million initiative, Harnessing the Power of Impact Investing, which has since evolved into the Foundation's Innovative Finance program. By 2015, the Innovative Finance program created the Zero Gap grant portfolio to provide seed funding to address the world's most pressing challenges, as defined by the UN Sustainable Development Goals (SDGs). Today, The Rockefeller Foundation's Innovative Finance team manages $100 million in active Program Related Investment commitments and has provided a total of $65 million of grant funding across the Zero Gap portfolio and climate finance.
* * *
About The Rockefeller Foundation
Investing $30 billion over the last 113 years to promote the well-being of humanity, The Rockefeller Foundation is a pioneering philanthropy built on unlikely partnerships and innovative solutions that deliver measurable results for people in the United States and around the world, including in association with RF Catalytic Capital Inc (RFCC). We leverage scientific breakthroughs, artificial intelligence, and new technologies to make big bets across energy, food, health, and finance. For more information, follow us on LinkedIn @the-rockefeller-foundation, X @RockefellerFdn, Instagram @rockefellerfdn, and YouTube @rockefellerfound, and sign up for our newsletter at www.rockefellerfoundation.org/subscribe.
* * *
About the John D. and Catherine T. MacArthur Foundation
The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions, and influential networks building a more just, verdant, and peaceful world. MacArthur's Impact Investment program is working to build the field of impact investing and provide catalytic capital to address social and environmental challenges around the world. To demonstrate the power of catalytic capital and to expand its use, MacArthur developed the Catalytic Capital Consortium, an initiative supported by a dozen philanthropic leaders including The Rockefeller Foundation and Omidyar Network. For more information, sign up for MacArthur's newsletter and follow us on LinkedIn.
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REPORT: https://www.rockefellerfoundation.org/wp-content/uploads/2026/07/Zero-Gap-Fund-2025-State-of-the-Portfolio-Report-Final.pdf
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Original text here: https://www.rockefellerfoundation.org/news/zero-gap-funds-catalytic-capital-multiplying-30m-sustains-1-05b-un-sustainable-development-goals/
Reason Foundation Issues Commentary: U.S. Loan to Argentina is a Bet on Javier Milei's Reforms
LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence:
* * *
The U.S. loan to Argentina is a bet on Javier Milei's reforms
Argentina's economic turnaround will depend on whether President Javier Milei can overcome political opposition and deliver lasting reforms.
-
Late last year, the United States effectively loaned $20 billion to the Argentine central bank, which immediately drew criticism as a "bailout." Sen. Elizabeth Warren (D-Mass.) even responded by introducing the "No Bailout for Argentina Act" in Congress, ... Show Full Article LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence: * * * The U.S. loan to Argentina is a bet on Javier Milei's reforms Argentina's economic turnaround will depend on whether President Javier Milei can overcome political opposition and deliver lasting reforms. - Late last year, the United States effectively loaned $20 billion to the Argentine central bank, which immediately drew criticism as a "bailout." Sen. Elizabeth Warren (D-Mass.) even responded by introducing the "No Bailout for Argentina Act" in Congress,though it has not received a hearing.
This skepticism is understandable, but the loan is not a gift. In fact, it's a continuation of a long-running series of multilateral financing for successive Argentine governments that the Trump administration hopes will allow President Javier Milei to continue advancing economic liberalization.
On Oct. 9, 2025, U.S. Treasury Secretary Scott Bessent announced that the United States had agreed to a $20 billion currency swap with Argentina's central bank using available dollars in the Treasury's Exchange Stabilization Fund (ESF). The ESF is a reserve pool originally created by Congress in 1934 to defend the dollar's global value, and it held approximately $35 billion in liquid assets prior to the agreement. The treasury secretary holds broad statutory authority to use this fund to purchase foreign currencies and deploy resources in support of U.S. economic and foreign policy interests without any congressional approval needed for particular disbursements.
A currency swap is a type of loan in which the U.S. Treasury, in this case, purchases pesos from Argentina's central bank in exchange for dollars, providing Buenos Aires with hard-currency reserves it can use to defend its exchange rate, service external obligations, and signal to private investors that the country has a credible monetary backstop. Argentina ultimately must buy its pesos back with dollars to restore the ESF's position. By late October, Argentina had drawn just $2.5 billion of the available $20 billion. Neither government has publicly disclosed the arrangement's full terms, including its duration or the interest rate Argentina must pay, a lack of transparency that has drawn legitimate congressional scrutiny.
This swap comes atop a substantial prior multilateral commitment. Earlier in 2025, the International Monetary Fund (IMF)'s executive board approved a 48-month Extended Fund Facility arrangement totaling $20 billion, constituting the IMF's 23rd loan program to Argentina since 1958. The World Bank and Inter-American Development Bank added another $22 billion in parallel financing. The treasury swap is thus not a standalone intervention but an additional layer of lending capacity aimed at sustaining market confidence in Argentina's latest iteration of economic reform so that private dollars will flow.
Whether that confidence is warranted begins with an honest accounting of Argentine financial history. The country has defaulted on its sovereign debt nine times, which is more than any other large country. The catastrophic default of 2001 led to a rapid freefall in the value of the peso that wiped out people's savings, led to banking freezes, and produced five presidential resignations within a period of weeks. Argentina defaulted again in 2014 and 2020. By 2023, it carried the world's highest inflation rate, and more than half its population lived in poverty. In 1910, Argentina was richer on a per capita basis than France or Germany, but today it has been reduced to a cautionary tale of self-inflicted decline through prolonged government deficits financed by money printing.
It was this accumulated catastrophe that generated the political conditions allowing libertarian economist Milei to become president. A rising generation of young Argentines has never known monetary or economic stability and craves the conditions that lead to opportunity. Pre-election surveys found 68 percent of voters between the ages of 16 and 24 backed Milei. Academics documented the emergence of mejorismo--a generational worldview crystallized through a decade of stagnation, COVID lockdowns, and chronic institutional failure--as a visceral rejection of everything that had come before. This would be expressed in the vocabulary of libertarianism as an ultimate rejection of the collectivist ideology that has dominated the country since the first presidency of Juan Peron and throughout its long period of economic decline.
Milei's first two years gave his supporters genuine reason for confidence. He converted a fiscal deficit exceeding five percent of GDP into a primary surplus within a single year and reduced monthly inflation from 25.5% in December 2023 to 1.5% by mid-2025. His party then vastly outperformed expectations in the October 2025 midterms, strengthening his congressional hand. As a condition of the April IMF arrangement, Argentina lifted most capital controls and replaced its fixed exchange rate with a managed float--a significant and necessary step toward monetary normalization.
Yet, after nearly a century of economic collectivism, the reforms that would make Argentina genuinely creditworthy on market terms remain incomplete. The most consequential unfinished business is to fix a tax code that punishes entrepreneurship and encourages a shocking share of the country to interact in illicit markets to evade taxation. When considering Argentina's 155 different tax levies, the combined effective corporate tax burden amounts to more than 106 percent of earnings for the average firm according to World Bank estimates. That's the highest effective corporate tax rate among all large countries and shows it's literally impossible to pay all the taxes. This reality has hollowed out the tax base by pushing both firms and individuals underground, with 44.1% of the employed adult workforce indicating they work in unregistered (In American terms, under-the-table) arrangements.
And the managed exchange rate band, while an improvement, is only a half-measure. Milei campaigned on recognizing the U.S. dollar as the official national currency. Informally, dollars are already widely used in Argentina because they are a better store of value than pesos. Argentines hold an estimated $200 to $270 billion in U.S. dollars. Meanwhile, the dollar value of all pesos in circulation is only around $15 billion. Nearly all real estate transactions occur in dollars. The Argentine people want dollars even if, and largely because, the government has used the issuance of new pesos to finance spending it can't otherwise afford. The market-based alternative to official dollarization is to allow the peso to trade freely without state intervention, but Milei has cautioned that speculators might respond by increasing prices, which would lead to a self-fulfilling fear of renewed inflation.
Ultimately, IMF loans and Treasury swap lines are just credit instruments meant to buy time. If liberalization reforms are sufficiently pervasive, Argentina could become a new global destination for private capital. Billionaire investor Peter Thiel seems to think so, as he recently made headlines by moving to Argentina part-time.
The Trump administration has made a calculated wager on an Argentine government that has demonstrated genuine willingness to absorb political pushback from entrenched interest groups to achieve structural change. But it pays off only if Milei remains committed to--and can secure congressional approval for--an ambitious agenda of liberalization.
* * *
Geoffrey Lawrence is research director at Reason Foundation.
* * *
Original text here: https://reason.org/commentary/the-u-s-loan-to-argentina-is-a-bet-on-javier-mileis-reforms/
* * *
The U.S. loan to Argentina is a bet on Javier Milei's reforms
Argentina's economic turnaround will depend on whether President Javier Milei can overcome political opposition and deliver lasting reforms.
-
Late last year, the United States effectively loaned $20 billion to the Argentine central bank, which immediately drew criticism as a "bailout." Sen. Elizabeth Warren (D-Mass.) even responded by introducing the "No Bailout for Argentina Act" in Congress, ... Show Full Article LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence: * * * The U.S. loan to Argentina is a bet on Javier Milei's reforms Argentina's economic turnaround will depend on whether President Javier Milei can overcome political opposition and deliver lasting reforms. - Late last year, the United States effectively loaned $20 billion to the Argentine central bank, which immediately drew criticism as a "bailout." Sen. Elizabeth Warren (D-Mass.) even responded by introducing the "No Bailout for Argentina Act" in Congress,though it has not received a hearing.
This skepticism is understandable, but the loan is not a gift. In fact, it's a continuation of a long-running series of multilateral financing for successive Argentine governments that the Trump administration hopes will allow President Javier Milei to continue advancing economic liberalization.
On Oct. 9, 2025, U.S. Treasury Secretary Scott Bessent announced that the United States had agreed to a $20 billion currency swap with Argentina's central bank using available dollars in the Treasury's Exchange Stabilization Fund (ESF). The ESF is a reserve pool originally created by Congress in 1934 to defend the dollar's global value, and it held approximately $35 billion in liquid assets prior to the agreement. The treasury secretary holds broad statutory authority to use this fund to purchase foreign currencies and deploy resources in support of U.S. economic and foreign policy interests without any congressional approval needed for particular disbursements.
A currency swap is a type of loan in which the U.S. Treasury, in this case, purchases pesos from Argentina's central bank in exchange for dollars, providing Buenos Aires with hard-currency reserves it can use to defend its exchange rate, service external obligations, and signal to private investors that the country has a credible monetary backstop. Argentina ultimately must buy its pesos back with dollars to restore the ESF's position. By late October, Argentina had drawn just $2.5 billion of the available $20 billion. Neither government has publicly disclosed the arrangement's full terms, including its duration or the interest rate Argentina must pay, a lack of transparency that has drawn legitimate congressional scrutiny.
This swap comes atop a substantial prior multilateral commitment. Earlier in 2025, the International Monetary Fund (IMF)'s executive board approved a 48-month Extended Fund Facility arrangement totaling $20 billion, constituting the IMF's 23rd loan program to Argentina since 1958. The World Bank and Inter-American Development Bank added another $22 billion in parallel financing. The treasury swap is thus not a standalone intervention but an additional layer of lending capacity aimed at sustaining market confidence in Argentina's latest iteration of economic reform so that private dollars will flow.
Whether that confidence is warranted begins with an honest accounting of Argentine financial history. The country has defaulted on its sovereign debt nine times, which is more than any other large country. The catastrophic default of 2001 led to a rapid freefall in the value of the peso that wiped out people's savings, led to banking freezes, and produced five presidential resignations within a period of weeks. Argentina defaulted again in 2014 and 2020. By 2023, it carried the world's highest inflation rate, and more than half its population lived in poverty. In 1910, Argentina was richer on a per capita basis than France or Germany, but today it has been reduced to a cautionary tale of self-inflicted decline through prolonged government deficits financed by money printing.
It was this accumulated catastrophe that generated the political conditions allowing libertarian economist Milei to become president. A rising generation of young Argentines has never known monetary or economic stability and craves the conditions that lead to opportunity. Pre-election surveys found 68 percent of voters between the ages of 16 and 24 backed Milei. Academics documented the emergence of mejorismo--a generational worldview crystallized through a decade of stagnation, COVID lockdowns, and chronic institutional failure--as a visceral rejection of everything that had come before. This would be expressed in the vocabulary of libertarianism as an ultimate rejection of the collectivist ideology that has dominated the country since the first presidency of Juan Peron and throughout its long period of economic decline.
Milei's first two years gave his supporters genuine reason for confidence. He converted a fiscal deficit exceeding five percent of GDP into a primary surplus within a single year and reduced monthly inflation from 25.5% in December 2023 to 1.5% by mid-2025. His party then vastly outperformed expectations in the October 2025 midterms, strengthening his congressional hand. As a condition of the April IMF arrangement, Argentina lifted most capital controls and replaced its fixed exchange rate with a managed float--a significant and necessary step toward monetary normalization.
Yet, after nearly a century of economic collectivism, the reforms that would make Argentina genuinely creditworthy on market terms remain incomplete. The most consequential unfinished business is to fix a tax code that punishes entrepreneurship and encourages a shocking share of the country to interact in illicit markets to evade taxation. When considering Argentina's 155 different tax levies, the combined effective corporate tax burden amounts to more than 106 percent of earnings for the average firm according to World Bank estimates. That's the highest effective corporate tax rate among all large countries and shows it's literally impossible to pay all the taxes. This reality has hollowed out the tax base by pushing both firms and individuals underground, with 44.1% of the employed adult workforce indicating they work in unregistered (In American terms, under-the-table) arrangements.
And the managed exchange rate band, while an improvement, is only a half-measure. Milei campaigned on recognizing the U.S. dollar as the official national currency. Informally, dollars are already widely used in Argentina because they are a better store of value than pesos. Argentines hold an estimated $200 to $270 billion in U.S. dollars. Meanwhile, the dollar value of all pesos in circulation is only around $15 billion. Nearly all real estate transactions occur in dollars. The Argentine people want dollars even if, and largely because, the government has used the issuance of new pesos to finance spending it can't otherwise afford. The market-based alternative to official dollarization is to allow the peso to trade freely without state intervention, but Milei has cautioned that speculators might respond by increasing prices, which would lead to a self-fulfilling fear of renewed inflation.
Ultimately, IMF loans and Treasury swap lines are just credit instruments meant to buy time. If liberalization reforms are sufficiently pervasive, Argentina could become a new global destination for private capital. Billionaire investor Peter Thiel seems to think so, as he recently made headlines by moving to Argentina part-time.
The Trump administration has made a calculated wager on an Argentine government that has demonstrated genuine willingness to absorb political pushback from entrenched interest groups to achieve structural change. But it pays off only if Milei remains committed to--and can secure congressional approval for--an ambitious agenda of liberalization.
* * *
Geoffrey Lawrence is research director at Reason Foundation.
* * *
Original text here: https://reason.org/commentary/the-u-s-loan-to-argentina-is-a-bet-on-javier-mileis-reforms/
Reason Foundation Issues Commentary: Argentina Teaches the Laffer Curve Lesson Washington Refuses to Learn
LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence:
* * *
Argentina teaches the Laffer Curve lesson Washington refuses to learn
New research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson for the United States.
-
For decades, the Laffer Curve has been treated as a theoretical curiosity. The premise of the Laffer Curve is that taxpayers will not support excessive levels of taxation. As taxes consume higher shares of a person's earnings, that person ... Show Full Article LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence: * * * Argentina teaches the Laffer Curve lesson Washington refuses to learn New research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson for the United States. - For decades, the Laffer Curve has been treated as a theoretical curiosity. The premise of the Laffer Curve is that taxpayers will not support excessive levels of taxation. As taxes consume higher shares of a person's earnings, that personstarts to either work less or to find ways to conceal their income to avoid taxation. In the aggregate, this means that at some point, raising tax rates begins to lead to a reduction in tax revenues because it causes the taxable base to shrink. Now, new research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson that the United States should learn.
Economist Arthur Laffer, for whom the idea is named, famously sketched a graph demonstrating this idea on a cocktail napkin in the 1970s. It later became the theoretical basis for the so-called "Reagan" tax cuts of 1981, which cut income taxes across all brackets and reduced the top rate from 70% down to 50%. Fifteen years later, Congress's Joint Economic Committee evaluated the impact of these tax cuts and witnessed that the share of tax revenue received from the top 1% of income earners climbed substantially despite the lower rate, indicating these high earners were now willing to generate more taxable income. As the committee concluded, "reduction in high marginal tax rates can induce taxpayers to lessen their reliance on tax shelters and tax avoidance, and expose more of their income to taxation." In other words, Laffer was right.
Argentina is the perfect case study of what happens when these principles are not applied. When President Javier Milei took office in December 2023, Argentina was a fiscal catastrophe by nearly any measure. Inflation exceeded 211% annually. At that rate, prices triple every year. The government was spending far beyond its means, and deficits were simply financed by printing money, which caused inflation.
The underreported part of this phenomenon is the role of taxes. Taxes in Argentina have become so high that they have pushed nearly half the country to the margins of society to avoid reporting income. According to Argentine census data, more than 44% of the employed workforce works on an unregistered basis because many firms and workers prefer to work outside the law so they can keep their income. The World Bank has consistently estimated that the effective corporate tax burden in Argentina exceeded 100% of average earnings. That means it's not even possible to pay all the taxes. Only Comoros--a tiny island nation near Madagascar--has a higher effective tax rate.
As these high taxes pushed both firms and workers to engage in what the Congress's Joint Economic Committee called "tax avoidance" by operating clandestinely, the tax base began to hollow out, and revenues could not keep pace with the increasing levels of entitlement spending ushered through by the governments of Nestor and Cristina Kirchner. That fiscal breach led to the more widely publicized inflation phenomenon.
This characterization of Argentina's fiscal spiral now has empirical support. In research I conducted for Reason Foundation in partnership with Fundacion Libertad y Progreso (an Argentine think tank), I examined how differing approaches to gross receipts taxation across the 23 provinces affect workers' self-reported employment status in Argentine census data. All provinces assess a gross receipts tax on businesses, but each one does so at different rates for every industry, and these rates often change from year to year. Although this complexity and volatility aren't great for tax policy, it does provide a rich dataset to measure the effect of taxation on individuals' decisions to participate in the legal or so-called "informal" economy.
The results show Argentina's tax rates are far beyond the revenue-maximizing level and that every increase in taxes leads to fewer revenues by pushing more people toward the street economy. The corollary is that tax cuts could help restore balance in Argentina. Milei, who worked quickly to balance the budget for the first time in decades after taking office, has received this message warmly and recently discussed some prospective tax reforms recommended in my research.
Ultimately, Milei's approach to reducing both taxes and spending is poised to ignite a new era of prosperity for Argentina. Real income per capita is already growing again, and the proportion of Argentines living in poverty has fallen precipitously. Tax reform based on the Laffer Curve's implications could be the next critical step to restore Argentina's workforce and economy.
These trends hold new relevance for the Laffer Curve in the United States. The federal budget deficit has exploded from $440 billion in 2015 to $1.8 trillion last year. Congress actually began this century with a budget surplus of $130 billion. As a result of these rapidly accumulating deficits, the total debt now reaches $38.5 trillion--it has more than doubled in just the last decade. This is occurring alongside an aging of the population as birth rates have fallen below replacement level.
The upshot is that the cost of mounting debts and old-age entitlements for baby boomers will fall on a shrinking workforce, who will struggle to pay them. In short, this squeeze looks similar to the pressures that wreaked economic chaos in Argentina. It was not older, conservative voters who turned to Milei, but a rising generation of self-described libertarians who became fed up with economic turmoil and the tax burden they were asked to bear.
The United States may soon face a similar reckoning. Congress has clearly abandoned any commitment to fiscal discipline. Congress hasn't even bothered to pass a budget on time since 1997, including periods of both Democratic and Republican control. Spending has also quickly outpaced revenues under presidents of both parties. Indeed, a commitment to fiscal recklessness might be the most bipartisan position in Washington.
But the underlying trends are clear. And Washington has been partially financing its deficits through monetary expansion for most of the 21st century, although that trend accelerated hugely in 2020-21 when the monetary base nearly doubled in a period of just 20 months.
It is tempting, particularly on the American right, to cast Milei and President Donald Trump as ideological twins. Both are political disruptors who ran against entrenched establishments. But on the substance of their policies, the comparison breaks down almost entirely. Milei's program rests on the conviction that excessive government spending and taxation and limits on commerce, produce worse economic results for ordinary people. Trump's approach often runs in the opposite direction. He has cheered active government intervention in markets, including through the direct purchase of private companies and the imposition of costly new taxes on trade. While Milei quickly slashed spending, spending has grown substantially throughout both Trump administrations.
It's unclear if there will be an American Milei in the future. Still, it's clear the federal government is creating the conditions that could lead to an insupportable level of frustration among the rising generation with the fiscal burden they've been asked to bear.
* * *
Geoffrey Lawrence is research director at Reason Foundation.
* * *
Original text here: https://reason.org/commentary/argentina-teaches-the-laffer-curve-lesson-washington-refuses-to-learn/
* * *
Argentina teaches the Laffer Curve lesson Washington refuses to learn
New research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson for the United States.
-
For decades, the Laffer Curve has been treated as a theoretical curiosity. The premise of the Laffer Curve is that taxpayers will not support excessive levels of taxation. As taxes consume higher shares of a person's earnings, that person ... Show Full Article LOS ANGELES, California, July 17 -- The Reason Foundation issued the following commentary by Research Director Geoffrey Lawrence: * * * Argentina teaches the Laffer Curve lesson Washington refuses to learn New research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson for the United States. - For decades, the Laffer Curve has been treated as a theoretical curiosity. The premise of the Laffer Curve is that taxpayers will not support excessive levels of taxation. As taxes consume higher shares of a person's earnings, that personstarts to either work less or to find ways to conceal their income to avoid taxation. In the aggregate, this means that at some point, raising tax rates begins to lead to a reduction in tax revenues because it causes the taxable base to shrink. Now, new research applying the Laffer Curve's principles to Argentina offers both a path forward for Argentine tax reform and a lesson that the United States should learn.
Economist Arthur Laffer, for whom the idea is named, famously sketched a graph demonstrating this idea on a cocktail napkin in the 1970s. It later became the theoretical basis for the so-called "Reagan" tax cuts of 1981, which cut income taxes across all brackets and reduced the top rate from 70% down to 50%. Fifteen years later, Congress's Joint Economic Committee evaluated the impact of these tax cuts and witnessed that the share of tax revenue received from the top 1% of income earners climbed substantially despite the lower rate, indicating these high earners were now willing to generate more taxable income. As the committee concluded, "reduction in high marginal tax rates can induce taxpayers to lessen their reliance on tax shelters and tax avoidance, and expose more of their income to taxation." In other words, Laffer was right.
Argentina is the perfect case study of what happens when these principles are not applied. When President Javier Milei took office in December 2023, Argentina was a fiscal catastrophe by nearly any measure. Inflation exceeded 211% annually. At that rate, prices triple every year. The government was spending far beyond its means, and deficits were simply financed by printing money, which caused inflation.
The underreported part of this phenomenon is the role of taxes. Taxes in Argentina have become so high that they have pushed nearly half the country to the margins of society to avoid reporting income. According to Argentine census data, more than 44% of the employed workforce works on an unregistered basis because many firms and workers prefer to work outside the law so they can keep their income. The World Bank has consistently estimated that the effective corporate tax burden in Argentina exceeded 100% of average earnings. That means it's not even possible to pay all the taxes. Only Comoros--a tiny island nation near Madagascar--has a higher effective tax rate.
As these high taxes pushed both firms and workers to engage in what the Congress's Joint Economic Committee called "tax avoidance" by operating clandestinely, the tax base began to hollow out, and revenues could not keep pace with the increasing levels of entitlement spending ushered through by the governments of Nestor and Cristina Kirchner. That fiscal breach led to the more widely publicized inflation phenomenon.
This characterization of Argentina's fiscal spiral now has empirical support. In research I conducted for Reason Foundation in partnership with Fundacion Libertad y Progreso (an Argentine think tank), I examined how differing approaches to gross receipts taxation across the 23 provinces affect workers' self-reported employment status in Argentine census data. All provinces assess a gross receipts tax on businesses, but each one does so at different rates for every industry, and these rates often change from year to year. Although this complexity and volatility aren't great for tax policy, it does provide a rich dataset to measure the effect of taxation on individuals' decisions to participate in the legal or so-called "informal" economy.
The results show Argentina's tax rates are far beyond the revenue-maximizing level and that every increase in taxes leads to fewer revenues by pushing more people toward the street economy. The corollary is that tax cuts could help restore balance in Argentina. Milei, who worked quickly to balance the budget for the first time in decades after taking office, has received this message warmly and recently discussed some prospective tax reforms recommended in my research.
Ultimately, Milei's approach to reducing both taxes and spending is poised to ignite a new era of prosperity for Argentina. Real income per capita is already growing again, and the proportion of Argentines living in poverty has fallen precipitously. Tax reform based on the Laffer Curve's implications could be the next critical step to restore Argentina's workforce and economy.
These trends hold new relevance for the Laffer Curve in the United States. The federal budget deficit has exploded from $440 billion in 2015 to $1.8 trillion last year. Congress actually began this century with a budget surplus of $130 billion. As a result of these rapidly accumulating deficits, the total debt now reaches $38.5 trillion--it has more than doubled in just the last decade. This is occurring alongside an aging of the population as birth rates have fallen below replacement level.
The upshot is that the cost of mounting debts and old-age entitlements for baby boomers will fall on a shrinking workforce, who will struggle to pay them. In short, this squeeze looks similar to the pressures that wreaked economic chaos in Argentina. It was not older, conservative voters who turned to Milei, but a rising generation of self-described libertarians who became fed up with economic turmoil and the tax burden they were asked to bear.
The United States may soon face a similar reckoning. Congress has clearly abandoned any commitment to fiscal discipline. Congress hasn't even bothered to pass a budget on time since 1997, including periods of both Democratic and Republican control. Spending has also quickly outpaced revenues under presidents of both parties. Indeed, a commitment to fiscal recklessness might be the most bipartisan position in Washington.
But the underlying trends are clear. And Washington has been partially financing its deficits through monetary expansion for most of the 21st century, although that trend accelerated hugely in 2020-21 when the monetary base nearly doubled in a period of just 20 months.
It is tempting, particularly on the American right, to cast Milei and President Donald Trump as ideological twins. Both are political disruptors who ran against entrenched establishments. But on the substance of their policies, the comparison breaks down almost entirely. Milei's program rests on the conviction that excessive government spending and taxation and limits on commerce, produce worse economic results for ordinary people. Trump's approach often runs in the opposite direction. He has cheered active government intervention in markets, including through the direct purchase of private companies and the imposition of costly new taxes on trade. While Milei quickly slashed spending, spending has grown substantially throughout both Trump administrations.
It's unclear if there will be an American Milei in the future. Still, it's clear the federal government is creating the conditions that could lead to an insupportable level of frustration among the rising generation with the fiscal burden they've been asked to bear.
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Geoffrey Lawrence is research director at Reason Foundation.
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Original text here: https://reason.org/commentary/argentina-teaches-the-laffer-curve-lesson-washington-refuses-to-learn/
Congressional Black Caucus Foundation Files Motion to Dismiss Meritless Complaint From American Alliance for Equal Rights and Defending Education
WASHINGTON, July 17 -- The Congressional Black Caucus Foundation issued the following news release:
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Congressional Black Caucus Foundation Files Motion to Dismiss Meritless Complaint from American Alliance for Equal Rights and Defending Education
The Congressional Black Caucus Foundation, Inc. ("CBCF") this morning responded in federal court to The American Alliance for Equal Rights and Defending Education's meritless complaint challenging The CBCF Spouses' Education Scholarship. Our response, linked here (https://www.dropbox.com/scl/fi/bhql1dxrx43tonlfvllxo/2026.07.16-12-1-Memorandum-in-Support-of-Motion-to-Dismiss-Plaintiffs.pdf?rlkey=q3bo35g9y31o09bhifpgsw66z&st=48qq9ze2&e=1&dl=0), ... Show Full Article WASHINGTON, July 17 -- The Congressional Black Caucus Foundation issued the following news release: * * * Congressional Black Caucus Foundation Files Motion to Dismiss Meritless Complaint from American Alliance for Equal Rights and Defending Education The Congressional Black Caucus Foundation, Inc. ("CBCF") this morning responded in federal court to The American Alliance for Equal Rights and Defending Education's meritless complaint challenging The CBCF Spouses' Education Scholarship. Our response, linked here (https://www.dropbox.com/scl/fi/bhql1dxrx43tonlfvllxo/2026.07.16-12-1-Memorandum-in-Support-of-Motion-to-Dismiss-Plaintiffs.pdf?rlkey=q3bo35g9y31o09bhifpgsw66z&st=48qq9ze2&e=1&dl=0),makes plain that the plaintiffs are wrong on both the facts and the law and that their lawsuit should be dismissed.
In response to this morning's filing, Nicole Austin-Hillery, President and CEO of the Congressional Black Caucus Foundation; and co-counsels Jason Schwartz, Partner at Gibson, Dunn & Crutcher LLP; and Alphonso David, Civil Rights Attorney and President & CEO of the Global Black Economic Forum issued the following statements:
"For 50 years, the Congressional Black Caucus Foundation has been dedicated to a world in which all communities have an equal voice in public policy including ensuring that African Americans and other marginalized communities in the United States have the opportunity to achieve the American Dream. For more than 40 of those years, the spouses of CBC members have supported the CBCF's Spouses' Education Scholarship program, furthering our commitment to public policy, research, education and leadership development by advancing our mission as an educational institution," said Nicole Austin-Hillery, President and CEO of the Congressional Black Caucus Foundation. "Today's motion to dismiss makes clear that the legal challenges to our scholarship program by the American Alliance for Equal Rights and Defending Education--another in their long line of efforts to target groups that advance the Black community---is without merit. The scholarship is entirely lawful, is an enormous benefit to all students, and will proceed to help countless students and the institutions that educate them."
"Today in our legal filing, the CBCF makes clear that the scholarship program they support and which the plaintiffs have wrongly challenged complies with the law," said co-counsel Jason Schwartz, Partner at Gibson Dunn. "The plaintiffs' challenge is wrong on both the facts and the law."
"The lawsuit filed by The American Alliance for Equal Rights and Defending Education against the CBCF is on its face baseless. Their misunderstanding of the law and lack of due diligence on the basic facts reveals that something far more consequential is at stake here. This lawsuit is an attack on the speech and debate privileges held by Members of Congress, an indifference to the first amendment freedoms of speech and association that we all enjoy and demeaning to the extraordinary generosity of a scholarship program created by African Americans but open to all," said co-counsel Alphonso David, Civil Rights Attorney and President & CEO of the Global Black Economic Forum. "The CBCF Spouses' Education Scholarship comports with the law and we expect this meritless lawsuit to be dismissed."
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Established in 1976, the Congressional Black Caucus Foundation, Inc. (CBCF) is a non-partisan, nonprofit, public policy, research, and educational institute committed to advancing the global black community by developing leaders, informing policy, and educating the public. For more information, visit cbcfinc.org. As a 501(c)(3), the CBCF takes no position on legislation or regulatory matters before Congress or any other government agency.
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Original text here: https://www.cbcfinc.org/press-releases/congressional-black-caucus-foundation-files-motion-to-dismiss-meritless-complaint-from-american-alliance-for-equal-rights-and-defending-education/
[Category: Political]
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Congressional Black Caucus Foundation Files Motion to Dismiss Meritless Complaint from American Alliance for Equal Rights and Defending Education
The Congressional Black Caucus Foundation, Inc. ("CBCF") this morning responded in federal court to The American Alliance for Equal Rights and Defending Education's meritless complaint challenging The CBCF Spouses' Education Scholarship. Our response, linked here (https://www.dropbox.com/scl/fi/bhql1dxrx43tonlfvllxo/2026.07.16-12-1-Memorandum-in-Support-of-Motion-to-Dismiss-Plaintiffs.pdf?rlkey=q3bo35g9y31o09bhifpgsw66z&st=48qq9ze2&e=1&dl=0), ... Show Full Article WASHINGTON, July 17 -- The Congressional Black Caucus Foundation issued the following news release: * * * Congressional Black Caucus Foundation Files Motion to Dismiss Meritless Complaint from American Alliance for Equal Rights and Defending Education The Congressional Black Caucus Foundation, Inc. ("CBCF") this morning responded in federal court to The American Alliance for Equal Rights and Defending Education's meritless complaint challenging The CBCF Spouses' Education Scholarship. Our response, linked here (https://www.dropbox.com/scl/fi/bhql1dxrx43tonlfvllxo/2026.07.16-12-1-Memorandum-in-Support-of-Motion-to-Dismiss-Plaintiffs.pdf?rlkey=q3bo35g9y31o09bhifpgsw66z&st=48qq9ze2&e=1&dl=0),makes plain that the plaintiffs are wrong on both the facts and the law and that their lawsuit should be dismissed.
In response to this morning's filing, Nicole Austin-Hillery, President and CEO of the Congressional Black Caucus Foundation; and co-counsels Jason Schwartz, Partner at Gibson, Dunn & Crutcher LLP; and Alphonso David, Civil Rights Attorney and President & CEO of the Global Black Economic Forum issued the following statements:
"For 50 years, the Congressional Black Caucus Foundation has been dedicated to a world in which all communities have an equal voice in public policy including ensuring that African Americans and other marginalized communities in the United States have the opportunity to achieve the American Dream. For more than 40 of those years, the spouses of CBC members have supported the CBCF's Spouses' Education Scholarship program, furthering our commitment to public policy, research, education and leadership development by advancing our mission as an educational institution," said Nicole Austin-Hillery, President and CEO of the Congressional Black Caucus Foundation. "Today's motion to dismiss makes clear that the legal challenges to our scholarship program by the American Alliance for Equal Rights and Defending Education--another in their long line of efforts to target groups that advance the Black community---is without merit. The scholarship is entirely lawful, is an enormous benefit to all students, and will proceed to help countless students and the institutions that educate them."
"Today in our legal filing, the CBCF makes clear that the scholarship program they support and which the plaintiffs have wrongly challenged complies with the law," said co-counsel Jason Schwartz, Partner at Gibson Dunn. "The plaintiffs' challenge is wrong on both the facts and the law."
"The lawsuit filed by The American Alliance for Equal Rights and Defending Education against the CBCF is on its face baseless. Their misunderstanding of the law and lack of due diligence on the basic facts reveals that something far more consequential is at stake here. This lawsuit is an attack on the speech and debate privileges held by Members of Congress, an indifference to the first amendment freedoms of speech and association that we all enjoy and demeaning to the extraordinary generosity of a scholarship program created by African Americans but open to all," said co-counsel Alphonso David, Civil Rights Attorney and President & CEO of the Global Black Economic Forum. "The CBCF Spouses' Education Scholarship comports with the law and we expect this meritless lawsuit to be dismissed."
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Established in 1976, the Congressional Black Caucus Foundation, Inc. (CBCF) is a non-partisan, nonprofit, public policy, research, and educational institute committed to advancing the global black community by developing leaders, informing policy, and educating the public. For more information, visit cbcfinc.org. As a 501(c)(3), the CBCF takes no position on legislation or regulatory matters before Congress or any other government agency.
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Original text here: https://www.cbcfinc.org/press-releases/congressional-black-caucus-foundation-files-motion-to-dismiss-meritless-complaint-from-american-alliance-for-equal-rights-and-defending-education/
[Category: Political]