Think Tanks
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Manhattan Institute Issues Commentary to New York Post: Innovation Nation - From the Airplane to the Lightbulb - Big, Bright Ideas Have Always Thrived in the Land of the Free
NEW YORK, July 1 -- The Manhattan Institute issued the following excerpts of a commentary on June 30, 2026, by senior fellow James B. Meigs to the New York Post:
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Innovation Nation: From the Airplane to the Lightbulb -- Big, Bright Ideas Have Always Thrived in the Land of the Free
On July 31, 1790, President George Washington affixed his elegant signature to a single piece of parchment. The short document credited Samuel Hopkins of Philadelphia with having "discovered an Improvement, not known or used before," in the production of potash, a chemical useful in making fertilizer and other ... Show Full Article NEW YORK, July 1 -- The Manhattan Institute issued the following excerpts of a commentary on June 30, 2026, by senior fellow James B. Meigs to the New York Post: * * * Innovation Nation: From the Airplane to the Lightbulb -- Big, Bright Ideas Have Always Thrived in the Land of the Free On July 31, 1790, President George Washington affixed his elegant signature to a single piece of parchment. The short document credited Samuel Hopkins of Philadelphia with having "discovered an Improvement, not known or used before," in the production of potash, a chemical useful in making fertilizer and otherproducts.
The statement granted Mr. Hopkins "the sole and exclusive Right and Liberty of using, and vending to others the said Discovery" for a period of 14 years.
Thus was issued the first US patent. Attorney General Edmund Randolph and Secretary of State Thomas Jefferson were also on hand to sign the document. Among all the weighty duties facing Washington and his cabinet, protecting the interests of a little-known inventor might strike us today as rather mundane.
But America's founders believed that guarding the rights of innovators was a crucial role of government.
Continue reading the entire piece here at the New York Post (https://nypost.com/2026/06/29/opinion/from-the-airplane-to-the-lightbulb-bright-ideas-thrive-in-us)
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James B. Meigs is a senior fellow at the Manhattan Institute and a City Journal contributing editor.
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Original text here: https://manhattan.institute/article/innovation-nation-from-the-airplane-to-the-lightbulb-big-bright-ideas-have-always-thrived-in-the-land-of-the-free
[Category: ThinkTank]
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Innovation Nation: From the Airplane to the Lightbulb -- Big, Bright Ideas Have Always Thrived in the Land of the Free
On July 31, 1790, President George Washington affixed his elegant signature to a single piece of parchment. The short document credited Samuel Hopkins of Philadelphia with having "discovered an Improvement, not known or used before," in the production of potash, a chemical useful in making fertilizer and other ... Show Full Article NEW YORK, July 1 -- The Manhattan Institute issued the following excerpts of a commentary on June 30, 2026, by senior fellow James B. Meigs to the New York Post: * * * Innovation Nation: From the Airplane to the Lightbulb -- Big, Bright Ideas Have Always Thrived in the Land of the Free On July 31, 1790, President George Washington affixed his elegant signature to a single piece of parchment. The short document credited Samuel Hopkins of Philadelphia with having "discovered an Improvement, not known or used before," in the production of potash, a chemical useful in making fertilizer and otherproducts.
The statement granted Mr. Hopkins "the sole and exclusive Right and Liberty of using, and vending to others the said Discovery" for a period of 14 years.
Thus was issued the first US patent. Attorney General Edmund Randolph and Secretary of State Thomas Jefferson were also on hand to sign the document. Among all the weighty duties facing Washington and his cabinet, protecting the interests of a little-known inventor might strike us today as rather mundane.
But America's founders believed that guarding the rights of innovators was a crucial role of government.
Continue reading the entire piece here at the New York Post (https://nypost.com/2026/06/29/opinion/from-the-airplane-to-the-lightbulb-bright-ideas-thrive-in-us)
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James B. Meigs is a senior fellow at the Manhattan Institute and a City Journal contributing editor.
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Original text here: https://manhattan.institute/article/innovation-nation-from-the-airplane-to-the-lightbulb-big-bright-ideas-have-always-thrived-in-the-land-of-the-free
[Category: ThinkTank]
Hudson Institute Issues Commentary to Vandenberg Coalition: Pompeo's Communist China and the Free World's Future Speech
WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Michael Sobolik to Vandenberg Coalition:
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Pompeo's Communist China and the Free World's Future Speech
In the midst of the COVID-19 pandemic, then-Secretary of State Mike Pompeo gave a speech making the case to the American people that the United States needed to reassess its approach to the People's Republic of China (PRC) and the Chinese Communist Party (CCP). It was the culmination ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Michael Sobolik to Vandenberg Coalition: * * * Pompeo's Communist China and the Free World's Future Speech In the midst of the COVID-19 pandemic, then-Secretary of State Mike Pompeo gave a speech making the case to the American people that the United States needed to reassess its approach to the People's Republic of China (PRC) and the Chinese Communist Party (CCP). It was the culminationof several speeches from high-ranking cabinet officials in President Trump's first term. While other remarks focused on ideology, espionage, and economics, Pompeo sought to "put it all together for the American people and detail what the China threat means for our economy, for our liberty, and indeed for the future of free democracies around the world."
Pompeo spoke at Richard Nixon's presidential library, a highly symbolic move. It was Nixon who laid the groundwork for Washington's diplomatic relationship with the PRC and also sought to downgrade America's relationship with Taiwan. It was Nixon who argued that the world could not be safe until China had changed, and he sought to change China by engaging it. Five decades on, Pompeo questioned what Americans had to show for that engagement?
Was the PRC a fair commercial partner? Did the CCP respect America's democratic system of government and its neighbors in the Indo-Pacific? Did China grow freer as it grew wealthier? Pompeo made the case that rather than changing China, the CCP was changing the free world, and would continue to degrade and exploit open societies if the status quo prevailed. "Today," the secretary of state warned, "China is increasingly authoritarian at home, and more aggressive in its hostility to freedom everywhere else."
It was the speech's call to action that set it apart. Pompeo focused on the CCP for the purpose of isolating it, not normalizing it as Nixon did. Whether in commerce, intelligence, cultural exchanges, or military affairs, the CCP was not "a normal country, just like any other." Thus, Pompeo called on America's allies to join the United States in demanding reciprocal, fair treatment from Beijing. Most notably, the 70th Secretary of State called on the United States and its partners to "engage and empower the Chinese people" to change their political future. Supporting this effort would be a new "alliance of democracies" bound by optimism in the future and resolve to oppose tyranny.
The speech was meant to be the final nail in the coffin of America's engagement policy with the CCP and project confidence in the United States' ability to prevail in great power competition. While the U.S.-China relationship has not categorically shifted in the ways Pompeo called for in 2020, his remarks serve as a worthy guidepost for what America's approach to the CCP could, and should, be.
Read in Vanderberg Coalition (https://vandenbergcoalition.org/beacon-of-liberty/contribution/pompeos-communist-china-speech.php).
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At A Glance:
Michael Sobolik is a senior fellow at Hudson Institute.
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Original text here: https://www.hudson.org/foreign-policy/pompeos-communist-china-free-worlds-future-speech-michael-sobolik
[Category: ThinkTank]
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Pompeo's Communist China and the Free World's Future Speech
In the midst of the COVID-19 pandemic, then-Secretary of State Mike Pompeo gave a speech making the case to the American people that the United States needed to reassess its approach to the People's Republic of China (PRC) and the Chinese Communist Party (CCP). It was the culmination ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Michael Sobolik to Vandenberg Coalition: * * * Pompeo's Communist China and the Free World's Future Speech In the midst of the COVID-19 pandemic, then-Secretary of State Mike Pompeo gave a speech making the case to the American people that the United States needed to reassess its approach to the People's Republic of China (PRC) and the Chinese Communist Party (CCP). It was the culminationof several speeches from high-ranking cabinet officials in President Trump's first term. While other remarks focused on ideology, espionage, and economics, Pompeo sought to "put it all together for the American people and detail what the China threat means for our economy, for our liberty, and indeed for the future of free democracies around the world."
Pompeo spoke at Richard Nixon's presidential library, a highly symbolic move. It was Nixon who laid the groundwork for Washington's diplomatic relationship with the PRC and also sought to downgrade America's relationship with Taiwan. It was Nixon who argued that the world could not be safe until China had changed, and he sought to change China by engaging it. Five decades on, Pompeo questioned what Americans had to show for that engagement?
Was the PRC a fair commercial partner? Did the CCP respect America's democratic system of government and its neighbors in the Indo-Pacific? Did China grow freer as it grew wealthier? Pompeo made the case that rather than changing China, the CCP was changing the free world, and would continue to degrade and exploit open societies if the status quo prevailed. "Today," the secretary of state warned, "China is increasingly authoritarian at home, and more aggressive in its hostility to freedom everywhere else."
It was the speech's call to action that set it apart. Pompeo focused on the CCP for the purpose of isolating it, not normalizing it as Nixon did. Whether in commerce, intelligence, cultural exchanges, or military affairs, the CCP was not "a normal country, just like any other." Thus, Pompeo called on America's allies to join the United States in demanding reciprocal, fair treatment from Beijing. Most notably, the 70th Secretary of State called on the United States and its partners to "engage and empower the Chinese people" to change their political future. Supporting this effort would be a new "alliance of democracies" bound by optimism in the future and resolve to oppose tyranny.
The speech was meant to be the final nail in the coffin of America's engagement policy with the CCP and project confidence in the United States' ability to prevail in great power competition. While the U.S.-China relationship has not categorically shifted in the ways Pompeo called for in 2020, his remarks serve as a worthy guidepost for what America's approach to the CCP could, and should, be.
Read in Vanderberg Coalition (https://vandenbergcoalition.org/beacon-of-liberty/contribution/pompeos-communist-china-speech.php).
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At A Glance:
Michael Sobolik is a senior fellow at Hudson Institute.
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Original text here: https://www.hudson.org/foreign-policy/pompeos-communist-china-free-worlds-future-speech-michael-sobolik
[Category: ThinkTank]
Hudson Institute Issues Commentary to Vandenberg Coalition: Marshall Plan Speech
WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by Peter Rough, director and senior fellow at the Center on Europe and Eurasia, to Vandenberg Coalition:
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Marshall Plan Speech
Of those never to have occupied the presidency of the United States, George Marshall may be the greatest American of the twentieth century. Marshall was the "organizer of victory" in the Second World War, as Churchill put it. His administrative acumen was surpassed only by his ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by Peter Rough, director and senior fellow at the Center on Europe and Eurasia, to Vandenberg Coalition: * * * Marshall Plan Speech Of those never to have occupied the presidency of the United States, George Marshall may be the greatest American of the twentieth century. Marshall was the "organizer of victory" in the Second World War, as Churchill put it. His administrative acumen was surpassed only by hisdignified bearing, born of a deep humility, which infused everything he did with competence and leadership. Marshall radiated greatness because he was totally selfless.
It is therefore all too fitting that Marshall, as secretary of state, did nothing to telegraph to the public that he would deliver one of the most important addresses in American history at Harvard University in June 1947. Harvard had offered the decorated statesman an honorary degree, but instead of accepting it with the sort of perfunctory remarks that characterize such occasions, Marshall took the opportunity to announce a European recovery program. He outlined with perspicacity how Europe might escape the cycle of war that had led to its ruin and "the vicious circle" of privation that was destroying it in the late 1940s.
In his speech, Marshall recognized that American leadership in Europe was indispensable to peace. He called on the American people to jettison the isolationism of the interwar years and "face up to the vast responsibility which history has clearly placed upon our country." But he also placed the onus for what became known as the Marshall Plan on Europe. "The initiative," Marshall argued, "must come from Europe [and] be a joint one, agreed to by a number, if not all European nations." In other words, Marshall envisioned European collaboration supported by the United States.
Crucially, Marshall rejected those powerful voices at home and abroad who called for exceptionally punitive terms for Germany. Instead of permanently repressing or dismembering Germany, Marshall aimed to unlock its economic and military potential for the West. By putting European skin in the game and resuscitating Germany, Marshall turned an economic support program into a boon for the U.S. economy.
It also positioned the United States for success in the Cold War. Just a few months earlier, Marshall had departed meetings in Moscow at loggerheads with the Soviets. In his speech at Harvard, he went on offense. Marshall announced that his plan "is directed not against any country or doctrine but against hunger, poverty, desperation and chaos." He added that "its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist." Marshall understood that Moscow had no intention of letting its satellites participate in a recovery program meant to foster freedom, autonomy, and cooperation. By rejecting Marshall's plan, the Soviets revealed the totalitarian nature of their system.
It is no exaggeration to say that the Marshall Plan set the post-war foundation for what became the transatlantic world. The fact that politicians and analysts still regularly invoke it to sell their own proposals today testifies to its near universal acclaim. George Marshall ranks amongst the very best of his generation.
Read in Vandenberg Coalition (https://vandenbergcoalition.org/beacon-of-liberty/contribution/marshall-plan-speech.php).
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At A Glance:
Peter Rough is a senior fellow and director of the Center on Europe and Eurasia at Hudson Institute.
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Original text here: https://www.hudson.org/politics-government/marshall-plan-speech-peter-rough
[Category: ThinkTank]
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Marshall Plan Speech
Of those never to have occupied the presidency of the United States, George Marshall may be the greatest American of the twentieth century. Marshall was the "organizer of victory" in the Second World War, as Churchill put it. His administrative acumen was surpassed only by his ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by Peter Rough, director and senior fellow at the Center on Europe and Eurasia, to Vandenberg Coalition: * * * Marshall Plan Speech Of those never to have occupied the presidency of the United States, George Marshall may be the greatest American of the twentieth century. Marshall was the "organizer of victory" in the Second World War, as Churchill put it. His administrative acumen was surpassed only by hisdignified bearing, born of a deep humility, which infused everything he did with competence and leadership. Marshall radiated greatness because he was totally selfless.
It is therefore all too fitting that Marshall, as secretary of state, did nothing to telegraph to the public that he would deliver one of the most important addresses in American history at Harvard University in June 1947. Harvard had offered the decorated statesman an honorary degree, but instead of accepting it with the sort of perfunctory remarks that characterize such occasions, Marshall took the opportunity to announce a European recovery program. He outlined with perspicacity how Europe might escape the cycle of war that had led to its ruin and "the vicious circle" of privation that was destroying it in the late 1940s.
In his speech, Marshall recognized that American leadership in Europe was indispensable to peace. He called on the American people to jettison the isolationism of the interwar years and "face up to the vast responsibility which history has clearly placed upon our country." But he also placed the onus for what became known as the Marshall Plan on Europe. "The initiative," Marshall argued, "must come from Europe [and] be a joint one, agreed to by a number, if not all European nations." In other words, Marshall envisioned European collaboration supported by the United States.
Crucially, Marshall rejected those powerful voices at home and abroad who called for exceptionally punitive terms for Germany. Instead of permanently repressing or dismembering Germany, Marshall aimed to unlock its economic and military potential for the West. By putting European skin in the game and resuscitating Germany, Marshall turned an economic support program into a boon for the U.S. economy.
It also positioned the United States for success in the Cold War. Just a few months earlier, Marshall had departed meetings in Moscow at loggerheads with the Soviets. In his speech at Harvard, he went on offense. Marshall announced that his plan "is directed not against any country or doctrine but against hunger, poverty, desperation and chaos." He added that "its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist." Marshall understood that Moscow had no intention of letting its satellites participate in a recovery program meant to foster freedom, autonomy, and cooperation. By rejecting Marshall's plan, the Soviets revealed the totalitarian nature of their system.
It is no exaggeration to say that the Marshall Plan set the post-war foundation for what became the transatlantic world. The fact that politicians and analysts still regularly invoke it to sell their own proposals today testifies to its near universal acclaim. George Marshall ranks amongst the very best of his generation.
Read in Vandenberg Coalition (https://vandenbergcoalition.org/beacon-of-liberty/contribution/marshall-plan-speech.php).
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At A Glance:
Peter Rough is a senior fellow and director of the Center on Europe and Eurasia at Hudson Institute.
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Original text here: https://www.hudson.org/politics-government/marshall-plan-speech-peter-rough
[Category: ThinkTank]
Hudson Institute Issues Commentary to AI Frontiers: Three Models of Sino-American Competition for the Soul of AI
WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Bill Drexel to AI Frontiers:
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Three Models of Sino-American Competition for the Soul of AI
American leaders agree that the AI race will shape the balance of power with China. But they can't agree on how to ensure the technology advances American values.
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When officials in Washington warn about losing the AI race to China, the conversation turns quickly to military and economic advantage--and ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Bill Drexel to AI Frontiers: * * * Three Models of Sino-American Competition for the Soul of AI American leaders agree that the AI race will shape the balance of power with China. But they can't agree on how to ensure the technology advances American values. - When officials in Washington warn about losing the AI race to China, the conversation turns quickly to military and economic advantage--andrightly so. Advanced AI will reshape everything from weapons systems to medicine, with massive implications for our geopolitical competitiveness. But beneath the great-power competition on AI lies a moral one. The ethical character of the most transformative technology in generations--one that will mediate an ever-larger share of human experience--will be a byproduct of superpower rivalry. At stake is the future of the relationship between individuals and the state, of privacy and control, of human agency and algorithmic authority.
The fear is not merely that China might build better systems, deploy them more widely, or out-sell American competitors. It is that those systems could carry a tide of new norms shaped by a government that surveils its citizens, suppresses dissent, harbors eugenic ambitions, and treats individual autonomy as a problem. As AI comes to dominate our lives as thoroughly as digital media already has--shaping our health and finances, how our children learn, how we are tracked, even our species' genetic makeup--this battle for AI's soul will affect us all intimately.
The contours of that battle are almost always left unexamined, but usually assume one of three forms: some leaders suggest AI's values will be a winner-takes-all byproduct of the race to technical superiority; others imply a conscious struggle to spread tools and platforms with value systems baked in; still others insist that diplomatic cooperation between AI powers is the only way to bend AI's ethical arc toward humanity's benefit. Leaving these three paradigms implicit does everyone a disservice, robbing the United States of both moral clarity and strategic opportunity.
Looking at the history of technological competition, there may be truth to all of these three models. But each implies a different approach to maintaining American leadership while preserving the values we claim to champion. And analyzing them clearly reveals how badly our attention is skewed. Today's debate fixates on breakaway dominance, blinding policymakers to the more consequential contests over encoded values and strategic diplomacy. A rebalanced approach would require something we currently lack: a clear, affirmative vision of what American AI should be for.
Breakaway Tech Dominance
"AI offers the potential promise of extending American hegemony." - Tyler Cowen
Breakaway tech dominance is the default (if often implicit) ambition for many leaders invested in the Sino-American AI competition. The thinking goes that if the US is able to master AI ahead of others, that advantage will translate into a general offset in American power over China, with powerful ripple effects in economics, culture, and politics globally. Because this winner-takes-all vision provides such a clear motivation for forging ahead, it is the one most often invoked by pro-tech voices and government leaders.
Historically, large technological advantages tend to precede hegemonic power. This dominant narrative about AI competition draws heavily on historical analogy. Britain's industrial revolution produced not just economic advantages but also cultural ascent. British institutions, law, language, and ideas spread across the globe on the strength of steam engines and mechanized looms. And this was not history's first instance of technological offset, a dynamic that has persisted since before the Assyrians' mastery of iron metallurgy expanded their influence over rival groups.
Applied to AI, this logic suggests that the first nation to achieve a decisive breakthrough could gain civilizational escape velocity. According to this view, if China masters AI before America does, Beijing's authoritarian model--surveillance systems, social credit schemes, algorithmic control of information and behavior--would spread globally with irresistible momentum. Given that many experts expect the AI transformation to be comparable in scope to industrialization or the dawn of the Iron Age, such fears are justified. Whether or not there are dramatic power shifts between the United States and China in the century ahead, AI is certain to play an outsized role.
According to this paradigm, the singular priority must be aggressive progress in AI capabilities. The strategic implication of this perspective is obvious: there is nothing so important as moving faster than China in pushing the bounds of AI technology. Additionally, there is little need for the United States to consider how American values relate to its AI strategy, because they are seen as downstream of the technical rivalry. In other words, if the United States establishes a decisive AI lead, its values will organically spread; if China masters the technology first, Beijing's moral vision will take root globally.
An AI lead sufficient to achieve hegemony is unlikely to appear on either side. The breakaway-dominance framework functions only if there is a defensible breakthrough to be had, which is not necessarily the case. Some predictions of a superintelligence "takeoff"--in which a sufficiently advanced AI system starts to improve itself better and faster than humans could--fit that mold. But despite regular predictions of imminent AGI breakthroughs, even many bullish researchers are increasingly skeptical of such a scenario, making the prospects of a highly dominant and defensible AI hegemon seem unlikely.
US-China competition is also too tight for breakaway dominance to occur. The observable pattern of AI progress in recent years suggests a different path. China has successfully positioned itself as an aggressive fast follower. In frontier models, the most competitive arena of AI competition, Chinese labs tend to trail American counterparts by just months at a fraction of the cost. That is an achievement in itself--and it diminishes the likelihood that the United States will achieve a sustained, decisive advantage. While not impossible, it's unlikely that we will see either country develop and maintain an AI lead significant enough to extend Chinese or Western values globally for any sustained length of time unchallenged. This winner-takes-all model, despite its implicit prominence in many policy discussions, almost certainly misses the full picture.
Encoded Values
"China is doing everything it can to dominate AI globally, and they will program the AI with Chinese values.... We've got to double down and make sure that American values are the values of the world, and that we control this global AI agenda." - Former US Senator Kyrsten Sinema (I-AZ)
A second model for looking at the moral stakes of Sino-American AI competition is the spread of encoded values: the ethics that are baked into new technologies, whether deliberately or subconsciously. This dynamic is ancient: Roman aqueducts built republican virtues into stone by distributing water first to public fountains, then to public baths, and only later to private homes. Fast-forward to the present day, when the internet stands out as a technology consciously designed with libertarian principles: decentralized architecture, open protocols, and resistance to central control. The resulting technology reflected those values in its most basic protocols (if only initially).
The same will be even truer of AI, given its unique ability to absorb and instantiate value systems. The protocols and architecture around AI systems may also reflect value decisions, but particular moral visions and preferences can also be directly distilled in today's AI systems--or rooted out of them.
China has been explicit about its intentions to imbue AI with its own values. Official Chinese government regulations mandate that frontier AI systems must "uphold core socialist values"--that is, they must adhere to the Chinese Communist Party's totalitarian view of history and morality. Chairman Xi Jinping has already made considerable strides toward that end. Beijing invests tens of billions of dollars annually in building a techno-authoritarian ecosystem of tools, platforms, standards, and norms aligned with state priorities: social stability, party authority, and collective "harmony," rather than individual autonomy. Its companies are experimenting with novel, AI-powered methods of conducting surveillance, enhancing censorship, and even predicting political dissent before it occurs.
US efforts to impart values into its AI ecosystem have been less concerted. The United States has been far less deliberate than China in developing AI consonant with American values. True, documents like the Biden administration's "AI Bill of Rights" and companies' interminable desire to write AI-principles documents at least pay lip service to the idea of aligning emerging AI systems with democratic principles. The clearest example of this might be Anthropic's approach to "constitutional AI," which aims to evoke the US Constitution in its model operations. And on balance, American AI companies' systems pay much greater attention to ethics and safety concerns than their Chinese counterparts do. But while these examples reflect a different culture around the development of AI in the United States, they are often only window dressing, and pale in comparison to the concerted state focus that Beijing exerts on the normative trajectory of China's tech sector.
In practice, American AI may actually erode American values more than it supports them. Indeed, American companies have historically been indispensable in building out China's techno-authoritarian ecosystem. Between public discourse-corrupting deepfakes, microtargeted political manipulation, and algorithmic amplification of extreme content, leading US developers are already arguably producing AI tools that weaken democracy more than they strengthen it. The governments of both superpowers are working to reap the efficiency benefits of AI in their state bureaucracies. But whereas China's regime is laying out a proactive vision for how AI will advance authoritarian control, the United States has been largely reactive in accommodating AI to democracy--waiting for courts to adjudicate how new technologies can or cannot be used according to existing American law.
The US needs a robust vision for democratic AI and the will to disseminate it. Breakaway-AI proponents see AI's future as a straightforward innovation race with downstream ethical repercussions. By contrast, proponents of AI as a system of encoded values see the future as a struggle over vision and will. To further American values and strengthen democracy, this view would require developing a much clearer vision: a compelling idea of how to use AI--not just by reactively implementing guardrails but by proactively conceptualizing what democratic AI should look like and enable. Will, equally important, is the drive to commercialize and aggressively spread the resulting systems around the world in collaboration with allies, while also preventing domestic companies from working with China in ways that undermine the United States' vision.
The Trump administration, by focusing largely on will, has seen some gains in diffusing US technology. But the PRC still maintains considerable diffusion advantages--especially in the Global South, where China's price-point advantages and shared development conditions give it an edge in building out AI infrastructure for developing nations. A values-driven AI vision, as described above, remains comparatively underdeveloped on the American side: Washington lacks an inspiring, affirmative narrative about what democratic AI enables for its citizens that authoritarian AI cannot.
The US vision deficit has downstream effects on will. Without a clear, compelling sense of what American companies are building toward, it is impossible to muster the political energy needed to make hard choices. For example, US firms are currently bolstering Beijing's AI ecosystem in sensitive domains like biotechnology, with little oversight. A stronger vision of American AI would galvanize support for restricting US companies from making such contributions to China's AI ecosystem.
Emergent Control Regimes
"What Soviet-American nuclear arms control was to world stability since the 1970s, U.S.-Chinese A.I. collaboration to make sure we effectively control these rapidly advancing A.I. systems will be for the stability of tomorrow's world."- New York Times columnist Thomas L. Friedman
The third paradigm for how the moral future of AI hinges on Sino-American competition is that of emergent control regimes--the shared rules and institutions that powers build over time to govern consequential technologies. For policy wonks, this is often the most overlooked--or, more accurately, the most dismissed--avenue for shaping outcomes. In part, it is not taken seriously because those who do raise it tend to do so with flagrant naivete about the weakness of the multilateral system and the political infeasibility of any good-faith agreement between the United States and China. But the idea that international control regimes might emerge over time and prove influential is not far-fetched, particularly in areas such as lethal autonomous weapons and AI-powered human gene editing.
The nuclear era shows that self-interest can drive even rivals to manage powerful technologies together, if imperfectly. Early in the Cold War, the idea that the United States and the Soviet Union could reach an agreement about nuclear weapons seemed fanciful. Nonetheless, both nations came to recognize that countering proliferation was in each nation's interest, even as they remained locked in an existential nuclear arms struggle. No one in 1945 could have predicted the specific contours of what emerged from the complex, path-dependent interactions among nuclear-armed states with evolving interests over decades: the Nuclear Non-Proliferation Treaty, the International Atomic Energy Agency (IAEA), test-ban agreements, verification mechanisms, and norms around nuclear use. While imperfect, these innovations have unquestionably shaped and constrained the most destructive technology that humanity has yet produced.
Advantages will accrue to whichever power crafts and brands politically feasible international controls. To be sure, there are limits on the degree to which such controls can be planned for, given how contingent they tend to be on changing relations and events. But this is not to say that any control regimes emerging from rapidly advancing AI systems are too contingent to plan for in any way. Such controls are not to be confused with the idealistic proposals--such as Pugwash-style scientist convenings or bilateral red-teaming exchanges--that are characteristic of most current track-two dialogues. Nor are they the feel-good unilateral pronouncements of rosy intentions like the resolution on "the promotion, protection and enjoyment of human rights on the Internet," passed six times by the UN Human Rights Council since 2012. As with nuclear controls, any diplomatic development of consequence will likely be highly controversial, and will necessarily fall far short of what most peace-loving technologists would like to see.
But imperfect measures can still be strategic. President Eisenhower's famous "Atoms for Peace" speech in 1953 set the foundation for the IAEA. It also served as a tremendous public relations victory for the United States, projecting America as the responsible superpower, willing to help other countries benefit from peaceful applications of atomic technology. It forced the Soviet Union to compete with the United States in building nuclear reactors for other countries, at a high cost to the Soviets. And subsequent US-Soviet nuclear arms control negotiations did more than help to constrain the risks of nuclear war; they also allowed the United States to pursue advantages in qualitative force capabilities at lower cost, under the auspices of quantitative weapons restrictions.
Compared with China, the US is better positioned to lead emergent control regimes. Technologists have given a great deal of thought to unrealistic controls for theoretical future AI capabilities. Yet little serious thought has gone into diplomacy in those areas where international controls could be made politically feasible, soft-power enhancing, and strategically advantageous. The partial exception is the American-led Political Declaration on Responsible Military Use of Artificial Intelligence and Autonomy, which has made strides toward establishing American leadership in rules around the use of lethal autonomous weapons. This guidance is both strategically beneficial to the United States and resonant with American values. Several other areas show promise for similar interventions, not least the ethically fraught genomic applications of emerging AI-powered biotech and the use of AI in high-risk industries. Here the United States has substantial untapped advantages: a global network of allies, a strong history of effective tech diplomacy, and a brand of AI development unencumbered by China's dystopian techno-authoritarianism. But these advantages so far have not deterred China's ambitious efforts to eke out a leading position in global AI governance.
A Rebalanced Approach
These three paradigms of AI competition--breakaway dominance, encoded values, and emergent control regimes--are not mutually exclusive. Some areas of AI may see defensible technological breakthroughs that confer long-term advantages; some will become battlegrounds for embedded values; some will develop controls; and some will combine elements from several of these paradigms. They are also interrelated: if one power successfully embeds its values into a widely adopted technology, it will likely occupy a privileged position in control discussions, for example. The question is not which single model is most accurate, but how to allocate attention and resources across all three, and for which issues.
Yet today's focus remains mistakenly skewed toward a winner-takes-all narrative, blinding policymakers to more consequential contests on encoded values and creative thinking on strategic diplomacy.
To take one example, while initial US nuclear dominance was essential, it was ultimately short-lived. Many developers of the weapon believed America's 1945 breakthrough would represent an enduring strategic advantage, similar to how many see the race to superintelligence as today's single defining competition. But America's nuclear dominance lasted just four short years. The Manhattan Project was indispensable--the United States' adversaries getting the bomb first would have been catastrophic. But those banking on sustained dominance were in for a rude awakening. Ultimately, clever nuclear diplomacy contributed more to the United States' victory over the Soviet Union than breakaway nuclear superiority, which never materialized.
Encoding values in technology requires proactive efforts. To the extent that a technology as broad as AI can be compared to a recent innovation, the best analogue is probably the internet--unfortunately, another cautionary tale. Although American engineers deliberately built the internet with libertarian principles, China has been able to co-opt it through force of will. Today, the Great Firewall and the other tools that the CCP has built into the Chinese internet have transformed a freedom-enhancing technology into history's most sophisticated instrument of surveillance, censorship, and control.
Beijing is exporting these tools abroad, enabling other autocracies to turn the internet away from its original open-society-enhancing design toward repressive ends. The story might have turned out differently if the United States had engaged in more proactive diplomacy--leveraging its unique influence over the development of China's internet, instead of just issuing feel-good digital-rights statements. At a minimum, curbing American tech companies' active support of Chinese technological ambitions would have slowed Beijing's successful authoritarian conquest of the internet. Indeed, the extent of American support for techno-authoritarian progress casts serious doubt on any assertion that the originating society of a technology will organically imbue that technology with its own values. For the war over embedded values, the internet's lesson is clear: technology neither establishes nor preserves values passively.
The US cannot rely on technological dominance to ensure that AI furthers American values. The United States must learn from these historical cases quickly. AI-powered Chinese "smart cities" are already spreading across the Global South, bringing with them surveillance architectures designed for authoritarian control. Cheap, CCP-compliant Chinese open-source frontier models are already gaining uptake internationally. Party-aligned research centers are developing AI-powered propaganda and censorship tools with unprecedented sophistication; these will soon be diffused abroad, if they haven't already. Policy and tech leaders may think that their efforts to simply accelerate American technical progress at the frontier of AI innovation will ensure that American values triumph. However, the more probable outcome could be a world awash in cheap, authoritarian AI that outcompetes slightly more sophisticated American offerings that do little to promote American values--and perhaps even erode them.
To course correct, the US must establish a President's council or congressional commission on democratic AI. A misguided fixation on a winner-takes-all race for technical superiority, as a proxy for a competition of values, risks missing where the real competition lies. It also misses opportunities to rout China diplomatically, similar to America's successes in nuclear diplomacy. A better approach to AI must start with developing a clearer moral vision for American AI. The President's Council on Bioethics, established under former President George W. Bush, offers an effective model of what this could look like: a substantive body bringing diverse perspectives to the highest levels of government to grapple with emerging ethical challenges, producing influential reports that shaped discourse and policy. A comparable council on AI and democratic governance could build the intellectual foundations for techno-democracy that do not yet exist, as the American Enterprise Institute's Council on AI Ethics is beginning to show.
Armed with a clearer, more compelling moral vision for AI, American technologists and policymakers could be galvanized toward supporting the United States' competition with China with sharper focus. Such a vision would also provide a basis to more aggressively curb American companies' substantial aiding and abetting of China's techno-authoritarian ecosystem. And it could provide a stronger foundation for closer collaboration with indispensable like-minded partners such as India: nations better equipped to compete with China on rolling out price-competitive and context-relevant AI offerings in the Global South.
There is little doubt that the Sino-American battle over AI will have tremendous consequences for the future of humanity. Approaching that contest with greater moral clarity is not just the right thing to do; it is also a strategic imperative.
Read in AI Frontiers (https://ai-frontiers.org/articles/three-models-of-sino-american-competition-for-the-soul-of-ai).
* * *
At A Glance:
Bill Drexel is a senior fellow at Hudson Institute.
* * *
Original text here: https://www.hudson.org/technology/three-models-sino-american-competition-soul-ai-bill-drexel
[Category: ThinkTank]
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Three Models of Sino-American Competition for the Soul of AI
American leaders agree that the AI race will shape the balance of power with China. But they can't agree on how to ensure the technology advances American values.
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When officials in Washington warn about losing the AI race to China, the conversation turns quickly to military and economic advantage--and ... Show Full Article WASHINGTON, July 1 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on June 30, 2026, by senior fellow Bill Drexel to AI Frontiers: * * * Three Models of Sino-American Competition for the Soul of AI American leaders agree that the AI race will shape the balance of power with China. But they can't agree on how to ensure the technology advances American values. - When officials in Washington warn about losing the AI race to China, the conversation turns quickly to military and economic advantage--andrightly so. Advanced AI will reshape everything from weapons systems to medicine, with massive implications for our geopolitical competitiveness. But beneath the great-power competition on AI lies a moral one. The ethical character of the most transformative technology in generations--one that will mediate an ever-larger share of human experience--will be a byproduct of superpower rivalry. At stake is the future of the relationship between individuals and the state, of privacy and control, of human agency and algorithmic authority.
The fear is not merely that China might build better systems, deploy them more widely, or out-sell American competitors. It is that those systems could carry a tide of new norms shaped by a government that surveils its citizens, suppresses dissent, harbors eugenic ambitions, and treats individual autonomy as a problem. As AI comes to dominate our lives as thoroughly as digital media already has--shaping our health and finances, how our children learn, how we are tracked, even our species' genetic makeup--this battle for AI's soul will affect us all intimately.
The contours of that battle are almost always left unexamined, but usually assume one of three forms: some leaders suggest AI's values will be a winner-takes-all byproduct of the race to technical superiority; others imply a conscious struggle to spread tools and platforms with value systems baked in; still others insist that diplomatic cooperation between AI powers is the only way to bend AI's ethical arc toward humanity's benefit. Leaving these three paradigms implicit does everyone a disservice, robbing the United States of both moral clarity and strategic opportunity.
Looking at the history of technological competition, there may be truth to all of these three models. But each implies a different approach to maintaining American leadership while preserving the values we claim to champion. And analyzing them clearly reveals how badly our attention is skewed. Today's debate fixates on breakaway dominance, blinding policymakers to the more consequential contests over encoded values and strategic diplomacy. A rebalanced approach would require something we currently lack: a clear, affirmative vision of what American AI should be for.
Breakaway Tech Dominance
"AI offers the potential promise of extending American hegemony." - Tyler Cowen
Breakaway tech dominance is the default (if often implicit) ambition for many leaders invested in the Sino-American AI competition. The thinking goes that if the US is able to master AI ahead of others, that advantage will translate into a general offset in American power over China, with powerful ripple effects in economics, culture, and politics globally. Because this winner-takes-all vision provides such a clear motivation for forging ahead, it is the one most often invoked by pro-tech voices and government leaders.
Historically, large technological advantages tend to precede hegemonic power. This dominant narrative about AI competition draws heavily on historical analogy. Britain's industrial revolution produced not just economic advantages but also cultural ascent. British institutions, law, language, and ideas spread across the globe on the strength of steam engines and mechanized looms. And this was not history's first instance of technological offset, a dynamic that has persisted since before the Assyrians' mastery of iron metallurgy expanded their influence over rival groups.
Applied to AI, this logic suggests that the first nation to achieve a decisive breakthrough could gain civilizational escape velocity. According to this view, if China masters AI before America does, Beijing's authoritarian model--surveillance systems, social credit schemes, algorithmic control of information and behavior--would spread globally with irresistible momentum. Given that many experts expect the AI transformation to be comparable in scope to industrialization or the dawn of the Iron Age, such fears are justified. Whether or not there are dramatic power shifts between the United States and China in the century ahead, AI is certain to play an outsized role.
According to this paradigm, the singular priority must be aggressive progress in AI capabilities. The strategic implication of this perspective is obvious: there is nothing so important as moving faster than China in pushing the bounds of AI technology. Additionally, there is little need for the United States to consider how American values relate to its AI strategy, because they are seen as downstream of the technical rivalry. In other words, if the United States establishes a decisive AI lead, its values will organically spread; if China masters the technology first, Beijing's moral vision will take root globally.
An AI lead sufficient to achieve hegemony is unlikely to appear on either side. The breakaway-dominance framework functions only if there is a defensible breakthrough to be had, which is not necessarily the case. Some predictions of a superintelligence "takeoff"--in which a sufficiently advanced AI system starts to improve itself better and faster than humans could--fit that mold. But despite regular predictions of imminent AGI breakthroughs, even many bullish researchers are increasingly skeptical of such a scenario, making the prospects of a highly dominant and defensible AI hegemon seem unlikely.
US-China competition is also too tight for breakaway dominance to occur. The observable pattern of AI progress in recent years suggests a different path. China has successfully positioned itself as an aggressive fast follower. In frontier models, the most competitive arena of AI competition, Chinese labs tend to trail American counterparts by just months at a fraction of the cost. That is an achievement in itself--and it diminishes the likelihood that the United States will achieve a sustained, decisive advantage. While not impossible, it's unlikely that we will see either country develop and maintain an AI lead significant enough to extend Chinese or Western values globally for any sustained length of time unchallenged. This winner-takes-all model, despite its implicit prominence in many policy discussions, almost certainly misses the full picture.
Encoded Values
"China is doing everything it can to dominate AI globally, and they will program the AI with Chinese values.... We've got to double down and make sure that American values are the values of the world, and that we control this global AI agenda." - Former US Senator Kyrsten Sinema (I-AZ)
A second model for looking at the moral stakes of Sino-American AI competition is the spread of encoded values: the ethics that are baked into new technologies, whether deliberately or subconsciously. This dynamic is ancient: Roman aqueducts built republican virtues into stone by distributing water first to public fountains, then to public baths, and only later to private homes. Fast-forward to the present day, when the internet stands out as a technology consciously designed with libertarian principles: decentralized architecture, open protocols, and resistance to central control. The resulting technology reflected those values in its most basic protocols (if only initially).
The same will be even truer of AI, given its unique ability to absorb and instantiate value systems. The protocols and architecture around AI systems may also reflect value decisions, but particular moral visions and preferences can also be directly distilled in today's AI systems--or rooted out of them.
China has been explicit about its intentions to imbue AI with its own values. Official Chinese government regulations mandate that frontier AI systems must "uphold core socialist values"--that is, they must adhere to the Chinese Communist Party's totalitarian view of history and morality. Chairman Xi Jinping has already made considerable strides toward that end. Beijing invests tens of billions of dollars annually in building a techno-authoritarian ecosystem of tools, platforms, standards, and norms aligned with state priorities: social stability, party authority, and collective "harmony," rather than individual autonomy. Its companies are experimenting with novel, AI-powered methods of conducting surveillance, enhancing censorship, and even predicting political dissent before it occurs.
US efforts to impart values into its AI ecosystem have been less concerted. The United States has been far less deliberate than China in developing AI consonant with American values. True, documents like the Biden administration's "AI Bill of Rights" and companies' interminable desire to write AI-principles documents at least pay lip service to the idea of aligning emerging AI systems with democratic principles. The clearest example of this might be Anthropic's approach to "constitutional AI," which aims to evoke the US Constitution in its model operations. And on balance, American AI companies' systems pay much greater attention to ethics and safety concerns than their Chinese counterparts do. But while these examples reflect a different culture around the development of AI in the United States, they are often only window dressing, and pale in comparison to the concerted state focus that Beijing exerts on the normative trajectory of China's tech sector.
In practice, American AI may actually erode American values more than it supports them. Indeed, American companies have historically been indispensable in building out China's techno-authoritarian ecosystem. Between public discourse-corrupting deepfakes, microtargeted political manipulation, and algorithmic amplification of extreme content, leading US developers are already arguably producing AI tools that weaken democracy more than they strengthen it. The governments of both superpowers are working to reap the efficiency benefits of AI in their state bureaucracies. But whereas China's regime is laying out a proactive vision for how AI will advance authoritarian control, the United States has been largely reactive in accommodating AI to democracy--waiting for courts to adjudicate how new technologies can or cannot be used according to existing American law.
The US needs a robust vision for democratic AI and the will to disseminate it. Breakaway-AI proponents see AI's future as a straightforward innovation race with downstream ethical repercussions. By contrast, proponents of AI as a system of encoded values see the future as a struggle over vision and will. To further American values and strengthen democracy, this view would require developing a much clearer vision: a compelling idea of how to use AI--not just by reactively implementing guardrails but by proactively conceptualizing what democratic AI should look like and enable. Will, equally important, is the drive to commercialize and aggressively spread the resulting systems around the world in collaboration with allies, while also preventing domestic companies from working with China in ways that undermine the United States' vision.
The Trump administration, by focusing largely on will, has seen some gains in diffusing US technology. But the PRC still maintains considerable diffusion advantages--especially in the Global South, where China's price-point advantages and shared development conditions give it an edge in building out AI infrastructure for developing nations. A values-driven AI vision, as described above, remains comparatively underdeveloped on the American side: Washington lacks an inspiring, affirmative narrative about what democratic AI enables for its citizens that authoritarian AI cannot.
The US vision deficit has downstream effects on will. Without a clear, compelling sense of what American companies are building toward, it is impossible to muster the political energy needed to make hard choices. For example, US firms are currently bolstering Beijing's AI ecosystem in sensitive domains like biotechnology, with little oversight. A stronger vision of American AI would galvanize support for restricting US companies from making such contributions to China's AI ecosystem.
Emergent Control Regimes
"What Soviet-American nuclear arms control was to world stability since the 1970s, U.S.-Chinese A.I. collaboration to make sure we effectively control these rapidly advancing A.I. systems will be for the stability of tomorrow's world."- New York Times columnist Thomas L. Friedman
The third paradigm for how the moral future of AI hinges on Sino-American competition is that of emergent control regimes--the shared rules and institutions that powers build over time to govern consequential technologies. For policy wonks, this is often the most overlooked--or, more accurately, the most dismissed--avenue for shaping outcomes. In part, it is not taken seriously because those who do raise it tend to do so with flagrant naivete about the weakness of the multilateral system and the political infeasibility of any good-faith agreement between the United States and China. But the idea that international control regimes might emerge over time and prove influential is not far-fetched, particularly in areas such as lethal autonomous weapons and AI-powered human gene editing.
The nuclear era shows that self-interest can drive even rivals to manage powerful technologies together, if imperfectly. Early in the Cold War, the idea that the United States and the Soviet Union could reach an agreement about nuclear weapons seemed fanciful. Nonetheless, both nations came to recognize that countering proliferation was in each nation's interest, even as they remained locked in an existential nuclear arms struggle. No one in 1945 could have predicted the specific contours of what emerged from the complex, path-dependent interactions among nuclear-armed states with evolving interests over decades: the Nuclear Non-Proliferation Treaty, the International Atomic Energy Agency (IAEA), test-ban agreements, verification mechanisms, and norms around nuclear use. While imperfect, these innovations have unquestionably shaped and constrained the most destructive technology that humanity has yet produced.
Advantages will accrue to whichever power crafts and brands politically feasible international controls. To be sure, there are limits on the degree to which such controls can be planned for, given how contingent they tend to be on changing relations and events. But this is not to say that any control regimes emerging from rapidly advancing AI systems are too contingent to plan for in any way. Such controls are not to be confused with the idealistic proposals--such as Pugwash-style scientist convenings or bilateral red-teaming exchanges--that are characteristic of most current track-two dialogues. Nor are they the feel-good unilateral pronouncements of rosy intentions like the resolution on "the promotion, protection and enjoyment of human rights on the Internet," passed six times by the UN Human Rights Council since 2012. As with nuclear controls, any diplomatic development of consequence will likely be highly controversial, and will necessarily fall far short of what most peace-loving technologists would like to see.
But imperfect measures can still be strategic. President Eisenhower's famous "Atoms for Peace" speech in 1953 set the foundation for the IAEA. It also served as a tremendous public relations victory for the United States, projecting America as the responsible superpower, willing to help other countries benefit from peaceful applications of atomic technology. It forced the Soviet Union to compete with the United States in building nuclear reactors for other countries, at a high cost to the Soviets. And subsequent US-Soviet nuclear arms control negotiations did more than help to constrain the risks of nuclear war; they also allowed the United States to pursue advantages in qualitative force capabilities at lower cost, under the auspices of quantitative weapons restrictions.
Compared with China, the US is better positioned to lead emergent control regimes. Technologists have given a great deal of thought to unrealistic controls for theoretical future AI capabilities. Yet little serious thought has gone into diplomacy in those areas where international controls could be made politically feasible, soft-power enhancing, and strategically advantageous. The partial exception is the American-led Political Declaration on Responsible Military Use of Artificial Intelligence and Autonomy, which has made strides toward establishing American leadership in rules around the use of lethal autonomous weapons. This guidance is both strategically beneficial to the United States and resonant with American values. Several other areas show promise for similar interventions, not least the ethically fraught genomic applications of emerging AI-powered biotech and the use of AI in high-risk industries. Here the United States has substantial untapped advantages: a global network of allies, a strong history of effective tech diplomacy, and a brand of AI development unencumbered by China's dystopian techno-authoritarianism. But these advantages so far have not deterred China's ambitious efforts to eke out a leading position in global AI governance.
A Rebalanced Approach
These three paradigms of AI competition--breakaway dominance, encoded values, and emergent control regimes--are not mutually exclusive. Some areas of AI may see defensible technological breakthroughs that confer long-term advantages; some will become battlegrounds for embedded values; some will develop controls; and some will combine elements from several of these paradigms. They are also interrelated: if one power successfully embeds its values into a widely adopted technology, it will likely occupy a privileged position in control discussions, for example. The question is not which single model is most accurate, but how to allocate attention and resources across all three, and for which issues.
Yet today's focus remains mistakenly skewed toward a winner-takes-all narrative, blinding policymakers to more consequential contests on encoded values and creative thinking on strategic diplomacy.
To take one example, while initial US nuclear dominance was essential, it was ultimately short-lived. Many developers of the weapon believed America's 1945 breakthrough would represent an enduring strategic advantage, similar to how many see the race to superintelligence as today's single defining competition. But America's nuclear dominance lasted just four short years. The Manhattan Project was indispensable--the United States' adversaries getting the bomb first would have been catastrophic. But those banking on sustained dominance were in for a rude awakening. Ultimately, clever nuclear diplomacy contributed more to the United States' victory over the Soviet Union than breakaway nuclear superiority, which never materialized.
Encoding values in technology requires proactive efforts. To the extent that a technology as broad as AI can be compared to a recent innovation, the best analogue is probably the internet--unfortunately, another cautionary tale. Although American engineers deliberately built the internet with libertarian principles, China has been able to co-opt it through force of will. Today, the Great Firewall and the other tools that the CCP has built into the Chinese internet have transformed a freedom-enhancing technology into history's most sophisticated instrument of surveillance, censorship, and control.
Beijing is exporting these tools abroad, enabling other autocracies to turn the internet away from its original open-society-enhancing design toward repressive ends. The story might have turned out differently if the United States had engaged in more proactive diplomacy--leveraging its unique influence over the development of China's internet, instead of just issuing feel-good digital-rights statements. At a minimum, curbing American tech companies' active support of Chinese technological ambitions would have slowed Beijing's successful authoritarian conquest of the internet. Indeed, the extent of American support for techno-authoritarian progress casts serious doubt on any assertion that the originating society of a technology will organically imbue that technology with its own values. For the war over embedded values, the internet's lesson is clear: technology neither establishes nor preserves values passively.
The US cannot rely on technological dominance to ensure that AI furthers American values. The United States must learn from these historical cases quickly. AI-powered Chinese "smart cities" are already spreading across the Global South, bringing with them surveillance architectures designed for authoritarian control. Cheap, CCP-compliant Chinese open-source frontier models are already gaining uptake internationally. Party-aligned research centers are developing AI-powered propaganda and censorship tools with unprecedented sophistication; these will soon be diffused abroad, if they haven't already. Policy and tech leaders may think that their efforts to simply accelerate American technical progress at the frontier of AI innovation will ensure that American values triumph. However, the more probable outcome could be a world awash in cheap, authoritarian AI that outcompetes slightly more sophisticated American offerings that do little to promote American values--and perhaps even erode them.
To course correct, the US must establish a President's council or congressional commission on democratic AI. A misguided fixation on a winner-takes-all race for technical superiority, as a proxy for a competition of values, risks missing where the real competition lies. It also misses opportunities to rout China diplomatically, similar to America's successes in nuclear diplomacy. A better approach to AI must start with developing a clearer moral vision for American AI. The President's Council on Bioethics, established under former President George W. Bush, offers an effective model of what this could look like: a substantive body bringing diverse perspectives to the highest levels of government to grapple with emerging ethical challenges, producing influential reports that shaped discourse and policy. A comparable council on AI and democratic governance could build the intellectual foundations for techno-democracy that do not yet exist, as the American Enterprise Institute's Council on AI Ethics is beginning to show.
Armed with a clearer, more compelling moral vision for AI, American technologists and policymakers could be galvanized toward supporting the United States' competition with China with sharper focus. Such a vision would also provide a basis to more aggressively curb American companies' substantial aiding and abetting of China's techno-authoritarian ecosystem. And it could provide a stronger foundation for closer collaboration with indispensable like-minded partners such as India: nations better equipped to compete with China on rolling out price-competitive and context-relevant AI offerings in the Global South.
There is little doubt that the Sino-American battle over AI will have tremendous consequences for the future of humanity. Approaching that contest with greater moral clarity is not just the right thing to do; it is also a strategic imperative.
Read in AI Frontiers (https://ai-frontiers.org/articles/three-models-of-sino-american-competition-for-the-soul-of-ai).
* * *
At A Glance:
Bill Drexel is a senior fellow at Hudson Institute.
* * *
Original text here: https://www.hudson.org/technology/three-models-sino-american-competition-soul-ai-bill-drexel
[Category: ThinkTank]
Center on Budget & Policy Priorities: Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show
WASHINGTON, July 1 -- The Center on Budget and Policy Priorities issued the following commentary on June 30, 2026, by Claire Heyison, senior policy analyst on health insurance and marketplace policy:
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Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show
Nearly 3 million fewer people were enrolled in health insurance through the Affordable Care Act's marketplaces in February 2026 than in February 2025, new data from the Centers for Medicare and Medicaid Services (CMS) show. These historic coverage losses follow a spike in premium costs, ... Show Full Article WASHINGTON, July 1 -- The Center on Budget and Policy Priorities issued the following commentary on June 30, 2026, by Claire Heyison, senior policy analyst on health insurance and marketplace policy: * * * Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show Nearly 3 million fewer people were enrolled in health insurance through the Affordable Care Act's marketplaces in February 2026 than in February 2025, new data from the Centers for Medicare and Medicaid Services (CMS) show. These historic coverage losses follow a spike in premium costs,which occurred after congressional Republicans and President Trump failed to extend premium tax credit (PTC) enhancements in 2025. CMS rule changes that made ACA marketplace plans more expensive and harder to access also took effect.
Enrollment fell from 22.1 million to 19.2 million (13 percent), the largest drop in effectuated enrollment since the ACA marketplaces were established, in 2014.
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Chart: Nearly Three Million Fewer People Enrolled in Marketplace Coverage After Affordability Cuts
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Earlier this year, CMS released data showing the number of people who selected a plan on the ACA marketplace during the open enrollment period (November 1, 2025 through January 16, 2026). These latest data show how many people paid their first month's premium and effectuated coverage as of February 2026. (People with $0 net premiums automatically effectuate coverage.) In 2026, 83 percent of people who selected a plan effectuated their coverage. That's down from 91 percent in 2025, indicating that a smaller share of people who selected coverage can afford their monthly premium.
Some people who didn't effectuate their marketplace coverage may have found coverage through Medicaid or an employer, but others are likely uninsured. Amid the premium increases, many who remained in the ACA marketplace switched to higher-deductible plans, which lowered what they pay in premiums but exposes them to higher costs when they need care.
These enrollment drops are only the beginning. More people are likely to drop coverage as their premium payments stack up through the year. One analysis projects that average marketplace enrollment could fall by as much as 26 percent in 2026, to about 16.5 million people. The harmful Republican megabill will take coverage away from millions more through its harsh Medicaid work requirements and other cuts to health programs.
CMS left out information in this year's effectuated enrollment report that was standard in past years, such as the percentage of people with and without PTCs who effectuated their coverage. This information could have told us more about the enhanced subsidies' effectiveness. For example, if effectuated enrollment dropped significantly among unsubsidized enrollees -- those with income above 400 percent of the federal poverty level who lost PTCs entirely when the enhancements expired -- we could infer that the PTC enhancements substantially helped people in this group afford health coverage.
Instead, the CMS report attempts to justify enrollment losses under the Trump Administration's by claiming that large levels of improper or fraudulent enrollment have been eliminated.
Agent and broker fraud has occurred in the marketplace and should be addressed. But the Trump Administration has inflated these numbers as a pretext for adopting policies that result in massive coverage loss. And many of the indicators that CMS cites as evidence of fraud -- like people with low incomes switching to $0 net premium bronze plans after the PTC enhancements expired and $0 net premium silver plans all but disappeared -- are better explained by rational responses to rising premiums. Other indicators they cite can be attributed to misleading metrics that don't account for short-term enrollment and other factors.
The Administration and congressional Republicans have let premiums rise and access to affordable health care fall. The people who need coverage to be able to pay to see a doctor when they're sick or to get treatment for chronic illnesses are losing out.
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Claire Heyison, Senior Policy Analyst -- Health Insurance and Marketplace Policy.
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Original text here: https://www.cbpp.org/blog/nearly-3-million-fewer-people-secured-marketplace-coverage-after-republican-health-care-cuts
[Category: ThinkTank]
* * *
Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show
Nearly 3 million fewer people were enrolled in health insurance through the Affordable Care Act's marketplaces in February 2026 than in February 2025, new data from the Centers for Medicare and Medicaid Services (CMS) show. These historic coverage losses follow a spike in premium costs, ... Show Full Article WASHINGTON, July 1 -- The Center on Budget and Policy Priorities issued the following commentary on June 30, 2026, by Claire Heyison, senior policy analyst on health insurance and marketplace policy: * * * Nearly 3 Million Fewer People Secured Marketplace Coverage After Republican Health Care Cuts, New Data Show Nearly 3 million fewer people were enrolled in health insurance through the Affordable Care Act's marketplaces in February 2026 than in February 2025, new data from the Centers for Medicare and Medicaid Services (CMS) show. These historic coverage losses follow a spike in premium costs,which occurred after congressional Republicans and President Trump failed to extend premium tax credit (PTC) enhancements in 2025. CMS rule changes that made ACA marketplace plans more expensive and harder to access also took effect.
Enrollment fell from 22.1 million to 19.2 million (13 percent), the largest drop in effectuated enrollment since the ACA marketplaces were established, in 2014.
* * *
Chart: Nearly Three Million Fewer People Enrolled in Marketplace Coverage After Affordability Cuts
* * *
Earlier this year, CMS released data showing the number of people who selected a plan on the ACA marketplace during the open enrollment period (November 1, 2025 through January 16, 2026). These latest data show how many people paid their first month's premium and effectuated coverage as of February 2026. (People with $0 net premiums automatically effectuate coverage.) In 2026, 83 percent of people who selected a plan effectuated their coverage. That's down from 91 percent in 2025, indicating that a smaller share of people who selected coverage can afford their monthly premium.
Some people who didn't effectuate their marketplace coverage may have found coverage through Medicaid or an employer, but others are likely uninsured. Amid the premium increases, many who remained in the ACA marketplace switched to higher-deductible plans, which lowered what they pay in premiums but exposes them to higher costs when they need care.
These enrollment drops are only the beginning. More people are likely to drop coverage as their premium payments stack up through the year. One analysis projects that average marketplace enrollment could fall by as much as 26 percent in 2026, to about 16.5 million people. The harmful Republican megabill will take coverage away from millions more through its harsh Medicaid work requirements and other cuts to health programs.
CMS left out information in this year's effectuated enrollment report that was standard in past years, such as the percentage of people with and without PTCs who effectuated their coverage. This information could have told us more about the enhanced subsidies' effectiveness. For example, if effectuated enrollment dropped significantly among unsubsidized enrollees -- those with income above 400 percent of the federal poverty level who lost PTCs entirely when the enhancements expired -- we could infer that the PTC enhancements substantially helped people in this group afford health coverage.
Instead, the CMS report attempts to justify enrollment losses under the Trump Administration's by claiming that large levels of improper or fraudulent enrollment have been eliminated.
Agent and broker fraud has occurred in the marketplace and should be addressed. But the Trump Administration has inflated these numbers as a pretext for adopting policies that result in massive coverage loss. And many of the indicators that CMS cites as evidence of fraud -- like people with low incomes switching to $0 net premium bronze plans after the PTC enhancements expired and $0 net premium silver plans all but disappeared -- are better explained by rational responses to rising premiums. Other indicators they cite can be attributed to misleading metrics that don't account for short-term enrollment and other factors.
The Administration and congressional Republicans have let premiums rise and access to affordable health care fall. The people who need coverage to be able to pay to see a doctor when they're sick or to get treatment for chronic illnesses are losing out.
* * *
Claire Heyison, Senior Policy Analyst -- Health Insurance and Marketplace Policy.
* * *
Original text here: https://www.cbpp.org/blog/nearly-3-million-fewer-people-secured-marketplace-coverage-after-republican-health-care-cuts
[Category: ThinkTank]
American Action Forum Issues Commentary: PCSA Fumbles the Competition
WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Competition Policy Director Fred Ashton:
* * *
The PCSA Fumbles the Competition
Executive Summary
* On May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) introduced the Protect College Sports Act of 2026 (PCSA) to establish a federal framework governing college athletics focused on student athletes' rights, media negotiations, consolidation, and competition; this legislation, which has bipartisan support, was introduced following the failure of similar legislation in the House of Representatives.
* ... Show Full Article WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Competition Policy Director Fred Ashton: * * * The PCSA Fumbles the Competition Executive Summary * On May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) introduced the Protect College Sports Act of 2026 (PCSA) to establish a federal framework governing college athletics focused on student athletes' rights, media negotiations, consolidation, and competition; this legislation, which has bipartisan support, was introduced following the failure of similar legislation in the House of Representatives. *Among the PCSA's many provisions, the act would preempt the current patchwork of state name, image, and likeness laws and grant a narrow antitrust exemption to the National Collegiate Athletic Association (NCAA) and College Sports Commission (CSC) to enforce eligibility, transfer, and revenue-sharing mandates.
* The legislation would restore much of the NCAA and CSC's governing authority - which had been diminished amid antitrust litigation - that trades market competition for regulatory stability, likely limiting the compensation and mobility of players and coaches, dampening innovation, and raising prices for consumers.
-
Introduction
On May 27, 2026, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA), respectively chairman and ranking member of the Senate Commerce Committee, introduced the Protect College Sports Act of 2026 (PCSA). The bill is the latest iteration of proposals - notably the SCORE Act which, despite several attempts, failed to gain support in the House of Representatives - to tame the perceived chaos that has engulfed college sports over name, image, and likeness (NIL) rights. This version, however, is the first to earn bipartisan support, significantly increasing the likelihood that it will move through the Senate.
Among the legislation's many provisions, the PCSA would grant the National Collegiate Athletic Association (NCAA) and College Sports Commission (CSC) an antitrust exemption enabling them to enforce athlete eligibility, transfer, and compensation rules. Moreover, the bill would limit in-season coaching movement and preempt the existing patchwork of state NIL laws.
For years, the NCAA - the primary nonprofit governing body of college athletics - acted as a cartel, limiting athlete compensation, determining eligibility, and limiting movement between schools. More recently, antitrust litigation, Supreme Court decisions, and state legislation freed athletes from these restrictions.
The PCSA largely reinstates the NCAA and CSC's authority over a broad swath of college athletics that could reduce the compensation and mobility of athletes and coaches, reversing these court decisions. Moreover, the bill could limit the ability of colleges and universities to compete for these assets while dampening innovation among media firms curating content amid less competition, ultimately raising prices for consumers.
* * *
Background
College athletics has been thrown into chaos in recent years after athletes gained the right to monetize their name, image, and likeness (NIL). As the acronym suggests, NIL are attributes of an individual, often with commercial value. Historically, the NCAA - the nonprofit governing body of college athletics with authority over rules, eligibility, compensation, and competition and comprised of nearly 1,100 colleges and universities and 102 athletic conferences - restricted the compensation of college athletes to the "cost of attendance."
Over the past decade, current and former athletes have filed antitrust lawsuits challenging these compensation restrictions. The Supreme Court's 2021 landmark decision in NCAA v. Alston held that the NCAA compensation rules violated Section 1 of the Sherman Act, which prohibits contracts or conspiracies in restraint of trade. While this ruling focused on a narrow subset of NCAA rules, it broke the dam and ushered in an NIL tidal wave. In the immediate wake of the Alston decision, the NCAA acted, allowing college athletes to retain their eligibility while monetizing their NIL rights. This decision was not voluntary but came in response to 27 states that had enacted legislation prohibiting universities from denying athletes of this right.
More recently, the U.S. District Court for the Northern District of California approved a settlement in the House v. NCAA class action lawsuit allowing former college athletes who did not have the opportunity to profit from NIL to collect damages. The NCAA and five other defendants - the Southeastern Conference, Big Ten, Atlantic Coast Conference, Big 12, and Pac-12 conferences - were ordered to pay almost $2.8 billion in back damages. They were also required to permit Division I schools to pay their athletes up to $20.5 million from athletic revenues, increasing incrementally over the 10-year settlement period. The College Sports Commission, formed by the five conferences, will implement the settlement.
Lawmakers have argued that these rulings have caused significant instability within college athletics and that a uniform regulatory authority is necessary to maintain fair competition across state lines. In response, college sports reform bills began surfacing following the O'Bannon decision - antitrust litigation involving NIL compensation - in 2014. More recently, various forms of the Student Compensation and Opportunity through Rights and Endorsements Act (SCORE) have been introduced, first in in 2021, and most recently in 2025. American Action Forum previously discussed the bill. Each iteration has been altered slightly, but all have failed to gain enough support and stalled in the House. In December 2025, Congresswoman Lori Trahan (D-MA) introduced the College Athletics Reform Act (CARA), a bill with a similar purpose and additional provisions. Like the SCORE Act, this measure also failed to garner sufficient support. In the wake of these failures, on May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) of the Senate Commerce Committee jointly introduced the PCSA.
Thus far, the PCSA has gained broader support than its predecessors. Relative to the SCORE Act, the PCSA has increased protections for women's and Olympic sports, is neutral on the employee status of student athletes, and has a more tailored antitrust exemption for the NCAA and CSC.
Key Provisions of the PCSA
The PCSA was proposed to "stabilize college sports, protect athletes and expand revenue sharing," by preempting disparate state laws governing NIL compensation, setting national standards for athlete eligibility and transfer ability, and creating requirements for institutional oversight by the NCAA, conferences, and other governing bodies.
Name, Image, and Likeness Protection
The successful antitrust litigation brought by current and former players against the NCAA opened the floodgates for NIL compensation. The PCSA codifies a student athlete's ability to earn compensation from NIL activities. It also bars institutions or governing bodies from restricting the ability of a student athlete from entering these deals - with limited exception tied to violating an institution's general code of conduct or using institutional branding - or reducing scholarships due to NIL income.
There are provisions, however, that attempt to distinguish legitimate NIL deals from those designed to circumvent revenue-sharing caps detailed in the legislation.
Transfers, Eligibility, and Coach Mobility
The legislation would also set a national standard for student athletes seeking to transfer institutions. Prior to 2018, student athletes transferring schools were typically required to sit out of competition for a full academic year. In 2018, the NCAA introduced the transfer portal, which was a digital system that allowed student athletes to declare their intent to transfer, facilitating the connection with other programs. These students, however, were still barred from competition for an academic year. This changed in 2021 when the NCAA adopted a rule allowing athletes to transfer one time during their college career and immediately participate, before the NCAA - amid legal pressure - eventually eliminated all transfer limits in 2024.
The unlimited number of transfers permitted without penalty wreaked havoc in college sports. Data from the NCAA showed that 14,610 undergraduates entered the transfer portal in 2025, up from 9,760 in 2023. Portal entrants among college athletes playing football in the Football Bowl Subdivision jumped from 1,741 to 2,776 over the same period. Part of the PCSA is to restore balance in the transfer mania. The legislation would permit a student athlete to transfer once without losing or delaying eligibility to participate with certain exceptions including the discontinuation of the sport or the departure of the head coach. A student athlete transferring for a second time would suffer a loss of eligibility for one academic year.
Relatedly, the PCSA establishes eligibility standards limited to a maximum of 5 calendar years beginning at the start of the regular academic year following whichever occurs first among a student athletes 19th birthday, actual or expected high school graduation date, or the date a student athlete enrolls full time at an institution.
The legislation would also restrict a football head coach or a coordinator's ability to transfer institutions mid-season. Coaches switching institutions would be barred from engaging in any coaching-related duties through the conclusion of the competitive season.
Revenue-sharing Cap
Citing House v. NCAA, the PSCA would effectively codify the settlement while extending its terms beyond the current end-date while adjusting the value annually for inflation.
Antitrust Exemptions and Consolidation
Enforcement
The PSCA provides the NCAA, CSC, conferences, and institutions with a narrow antitrust exemption to develop and enforce rules governing NIL activity, revenue-sharing, transfers, eligibility, and recruiting.
Without this legislative protection, the NCAA and other governing bodies - which are private associations of competitors - would unlikely be able to enforce the provisions outlined in the bill without fear of future antitrust litigation. As Supreme Court Justice Brett Kavanaugh wrote in his concurring opinion in Alston, "The NCAA's business model would be flatly illegal in almost any other industry in America," and that "Nowhere else in America can businesses get away with agreeing to not pay their workers a fair market rate...the NCAA is not above the law." While compensation of student athletes has radically changed in the wake of Alston and other court decisions, provisions in the law could be interpreted as anticompetitive in that they restrict how much student athletes can earn and their mobility.
The antitrust immunity, however, is conditional on the NCAA, CSC, conferences, and institutions developing, adopting, and implementing rules reflecting the provisions of the PCSA. If these organizations create rules that go beyond the scope of PCSA, they will be subject to liability.
Media Rights and Broadcasting
The bill permits collective media rights negotiations while protecting non-revenue-generating sports (typically sports other than basketball and football). The bill amends and extends the antitrust exemption in the Sports Broadcasting Act of 1961 to intercollegiate athletics. The exemption would allow institutions and conferences to pool voluntarily and negotiate collective media rights. To qualify for the exemption, no less than 75 percent of the institutions participating in the Football Bowl Subdivision must agree.
Consolidation
In the original text of the PCSA, conferences reporting more than $1 billion in revenue on fiscal year 2025 tax returns would be prohibited from merging or consolidating, acquiring assets, media rights, or membership of another conference. Currently, only the Big Ten Conference and the Southeastern Conference would be subject to these restrictions. These two conferences have expanded membership in the past 15 years. During the markup session on June 18, this revenue cap was lowered to $700 million, which adds the Atlantic Coast Conference to the list of conferences prohibited from merging or consolidating. In other words, the current alignment of conferences would largely be frozen, and with no sunset provision in the legislation, it is unclear how long this would last.
The bill also explicitly states that efficiencies, procompetitive effects, or any other defense under antitrust laws can be used to justify expansion.
The Risks of PCSA
While the PCSA may fulfill its mandate to restore order in college athletics and protect women's and Olympic sports, it risks doing so at the expense of competition. In using targeted antitrust exemptions to restore the power of the NCAA, conferences, and CSC, and preempting state NIL laws, the PCSA could limit the compensation of student athletes and coaches and conferences from becoming more efficient.
By codifying the House settlement, compensation of student athletes would be directly tied to revenue-sharing and spending caps. Furthermore, the fair market value mandate of NIL deals could lower prospective earnings. The PCSA could also risk inhibiting competition among institutions for student athletes and coaches. Restricting student athletes' ability to transfer multiple times without penalty could limit a student athlete's ability to sell their talent to competing programs. For coaches, prohibiting penalty-free mid-season transfers results in the same dampening of competition for talent.
The restrictions on conferences merging, consolidating, or absorbing institutions from other conferences would halt market-driven realignment. While the intent is to prevent the creation of a super-conference, it could solidify the position of the largest conferences. Moreover, institutions that are members of smaller conferences may have reduced incentives to invest in their athletic programs knowing they cannot be absorbed by larger conferences to acquire more lucrative media deals.
The provision expanding the Sports Broadcasting Act of 1961 that would shield pooled media rights from antitrust litigation could create comparable competitive concerns involving the National Football League (NFL) currently being scrutinized by the House Subcommittee on the Administrative State, Regulatory Reform, and Antitrust.
The combination of pooled media rights and frozen conferences would likely limit competition for media rights. Today, the big four major conferences - Big Ten, Southeastern Conference, Atlantic Coast Conference, and Big 12 - and other conferences negotiate separately with broadcasters. This drives down prices and fosters innovation in the packaging and distribution of content. The ability of conferences to negotiate collectively would give these institutions and conferences greater leverage over broadcasters and other viewing platforms. The collective negotiations would likely result in more revenue for these institutions and conferences - and help protect women's and Olympic sports - but come at the expense of consumers in the form of higher prices passed on by the increased cost to broadcasters.
What Can Congress Do?
Antitrust exemptions, by definition, provide protections for activity that would otherwise be considered illegal. As noted earlier, Justice Kavanaugh argued that the NCAA's business model would be "flatly illegal in almost any other industry in America." Relying on antitrust exemptions requires the ability to predict how markets would look in the future. There are several antitrust exemptions, including the Sports Broadcasting Act of 1961, that are being reconsidered.
Rather than reinstating the NCAA's authority to impose anticompetitive rules, Congress could establish national rules for NIL deals and compensation, transfers, and recruiting.
The antitrust exemptions, specifically those involving media rights, would likely give institutions and conferences increased market power that would ultimately be paid for by consumers.
* * *
Fred Ashton is the Director of Competition Policy at the American Action Forum.
* * *
Original text here: https://www.americanactionforum.org/insight/the-pcsa-fumbles-the-competition/
[Category: Think Tank]
* * *
The PCSA Fumbles the Competition
Executive Summary
* On May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) introduced the Protect College Sports Act of 2026 (PCSA) to establish a federal framework governing college athletics focused on student athletes' rights, media negotiations, consolidation, and competition; this legislation, which has bipartisan support, was introduced following the failure of similar legislation in the House of Representatives.
* ... Show Full Article WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Competition Policy Director Fred Ashton: * * * The PCSA Fumbles the Competition Executive Summary * On May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) introduced the Protect College Sports Act of 2026 (PCSA) to establish a federal framework governing college athletics focused on student athletes' rights, media negotiations, consolidation, and competition; this legislation, which has bipartisan support, was introduced following the failure of similar legislation in the House of Representatives. *Among the PCSA's many provisions, the act would preempt the current patchwork of state name, image, and likeness laws and grant a narrow antitrust exemption to the National Collegiate Athletic Association (NCAA) and College Sports Commission (CSC) to enforce eligibility, transfer, and revenue-sharing mandates.
* The legislation would restore much of the NCAA and CSC's governing authority - which had been diminished amid antitrust litigation - that trades market competition for regulatory stability, likely limiting the compensation and mobility of players and coaches, dampening innovation, and raising prices for consumers.
-
Introduction
On May 27, 2026, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA), respectively chairman and ranking member of the Senate Commerce Committee, introduced the Protect College Sports Act of 2026 (PCSA). The bill is the latest iteration of proposals - notably the SCORE Act which, despite several attempts, failed to gain support in the House of Representatives - to tame the perceived chaos that has engulfed college sports over name, image, and likeness (NIL) rights. This version, however, is the first to earn bipartisan support, significantly increasing the likelihood that it will move through the Senate.
Among the legislation's many provisions, the PCSA would grant the National Collegiate Athletic Association (NCAA) and College Sports Commission (CSC) an antitrust exemption enabling them to enforce athlete eligibility, transfer, and compensation rules. Moreover, the bill would limit in-season coaching movement and preempt the existing patchwork of state NIL laws.
For years, the NCAA - the primary nonprofit governing body of college athletics - acted as a cartel, limiting athlete compensation, determining eligibility, and limiting movement between schools. More recently, antitrust litigation, Supreme Court decisions, and state legislation freed athletes from these restrictions.
The PCSA largely reinstates the NCAA and CSC's authority over a broad swath of college athletics that could reduce the compensation and mobility of athletes and coaches, reversing these court decisions. Moreover, the bill could limit the ability of colleges and universities to compete for these assets while dampening innovation among media firms curating content amid less competition, ultimately raising prices for consumers.
* * *
Background
College athletics has been thrown into chaos in recent years after athletes gained the right to monetize their name, image, and likeness (NIL). As the acronym suggests, NIL are attributes of an individual, often with commercial value. Historically, the NCAA - the nonprofit governing body of college athletics with authority over rules, eligibility, compensation, and competition and comprised of nearly 1,100 colleges and universities and 102 athletic conferences - restricted the compensation of college athletes to the "cost of attendance."
Over the past decade, current and former athletes have filed antitrust lawsuits challenging these compensation restrictions. The Supreme Court's 2021 landmark decision in NCAA v. Alston held that the NCAA compensation rules violated Section 1 of the Sherman Act, which prohibits contracts or conspiracies in restraint of trade. While this ruling focused on a narrow subset of NCAA rules, it broke the dam and ushered in an NIL tidal wave. In the immediate wake of the Alston decision, the NCAA acted, allowing college athletes to retain their eligibility while monetizing their NIL rights. This decision was not voluntary but came in response to 27 states that had enacted legislation prohibiting universities from denying athletes of this right.
More recently, the U.S. District Court for the Northern District of California approved a settlement in the House v. NCAA class action lawsuit allowing former college athletes who did not have the opportunity to profit from NIL to collect damages. The NCAA and five other defendants - the Southeastern Conference, Big Ten, Atlantic Coast Conference, Big 12, and Pac-12 conferences - were ordered to pay almost $2.8 billion in back damages. They were also required to permit Division I schools to pay their athletes up to $20.5 million from athletic revenues, increasing incrementally over the 10-year settlement period. The College Sports Commission, formed by the five conferences, will implement the settlement.
Lawmakers have argued that these rulings have caused significant instability within college athletics and that a uniform regulatory authority is necessary to maintain fair competition across state lines. In response, college sports reform bills began surfacing following the O'Bannon decision - antitrust litigation involving NIL compensation - in 2014. More recently, various forms of the Student Compensation and Opportunity through Rights and Endorsements Act (SCORE) have been introduced, first in in 2021, and most recently in 2025. American Action Forum previously discussed the bill. Each iteration has been altered slightly, but all have failed to gain enough support and stalled in the House. In December 2025, Congresswoman Lori Trahan (D-MA) introduced the College Athletics Reform Act (CARA), a bill with a similar purpose and additional provisions. Like the SCORE Act, this measure also failed to garner sufficient support. In the wake of these failures, on May 27, Senators Ted Cruz (R-TX) and Maria Cantwell (D-WA) of the Senate Commerce Committee jointly introduced the PCSA.
Thus far, the PCSA has gained broader support than its predecessors. Relative to the SCORE Act, the PCSA has increased protections for women's and Olympic sports, is neutral on the employee status of student athletes, and has a more tailored antitrust exemption for the NCAA and CSC.
Key Provisions of the PCSA
The PCSA was proposed to "stabilize college sports, protect athletes and expand revenue sharing," by preempting disparate state laws governing NIL compensation, setting national standards for athlete eligibility and transfer ability, and creating requirements for institutional oversight by the NCAA, conferences, and other governing bodies.
Name, Image, and Likeness Protection
The successful antitrust litigation brought by current and former players against the NCAA opened the floodgates for NIL compensation. The PCSA codifies a student athlete's ability to earn compensation from NIL activities. It also bars institutions or governing bodies from restricting the ability of a student athlete from entering these deals - with limited exception tied to violating an institution's general code of conduct or using institutional branding - or reducing scholarships due to NIL income.
There are provisions, however, that attempt to distinguish legitimate NIL deals from those designed to circumvent revenue-sharing caps detailed in the legislation.
Transfers, Eligibility, and Coach Mobility
The legislation would also set a national standard for student athletes seeking to transfer institutions. Prior to 2018, student athletes transferring schools were typically required to sit out of competition for a full academic year. In 2018, the NCAA introduced the transfer portal, which was a digital system that allowed student athletes to declare their intent to transfer, facilitating the connection with other programs. These students, however, were still barred from competition for an academic year. This changed in 2021 when the NCAA adopted a rule allowing athletes to transfer one time during their college career and immediately participate, before the NCAA - amid legal pressure - eventually eliminated all transfer limits in 2024.
The unlimited number of transfers permitted without penalty wreaked havoc in college sports. Data from the NCAA showed that 14,610 undergraduates entered the transfer portal in 2025, up from 9,760 in 2023. Portal entrants among college athletes playing football in the Football Bowl Subdivision jumped from 1,741 to 2,776 over the same period. Part of the PCSA is to restore balance in the transfer mania. The legislation would permit a student athlete to transfer once without losing or delaying eligibility to participate with certain exceptions including the discontinuation of the sport or the departure of the head coach. A student athlete transferring for a second time would suffer a loss of eligibility for one academic year.
Relatedly, the PCSA establishes eligibility standards limited to a maximum of 5 calendar years beginning at the start of the regular academic year following whichever occurs first among a student athletes 19th birthday, actual or expected high school graduation date, or the date a student athlete enrolls full time at an institution.
The legislation would also restrict a football head coach or a coordinator's ability to transfer institutions mid-season. Coaches switching institutions would be barred from engaging in any coaching-related duties through the conclusion of the competitive season.
Revenue-sharing Cap
Citing House v. NCAA, the PSCA would effectively codify the settlement while extending its terms beyond the current end-date while adjusting the value annually for inflation.
Antitrust Exemptions and Consolidation
Enforcement
The PSCA provides the NCAA, CSC, conferences, and institutions with a narrow antitrust exemption to develop and enforce rules governing NIL activity, revenue-sharing, transfers, eligibility, and recruiting.
Without this legislative protection, the NCAA and other governing bodies - which are private associations of competitors - would unlikely be able to enforce the provisions outlined in the bill without fear of future antitrust litigation. As Supreme Court Justice Brett Kavanaugh wrote in his concurring opinion in Alston, "The NCAA's business model would be flatly illegal in almost any other industry in America," and that "Nowhere else in America can businesses get away with agreeing to not pay their workers a fair market rate...the NCAA is not above the law." While compensation of student athletes has radically changed in the wake of Alston and other court decisions, provisions in the law could be interpreted as anticompetitive in that they restrict how much student athletes can earn and their mobility.
The antitrust immunity, however, is conditional on the NCAA, CSC, conferences, and institutions developing, adopting, and implementing rules reflecting the provisions of the PCSA. If these organizations create rules that go beyond the scope of PCSA, they will be subject to liability.
Media Rights and Broadcasting
The bill permits collective media rights negotiations while protecting non-revenue-generating sports (typically sports other than basketball and football). The bill amends and extends the antitrust exemption in the Sports Broadcasting Act of 1961 to intercollegiate athletics. The exemption would allow institutions and conferences to pool voluntarily and negotiate collective media rights. To qualify for the exemption, no less than 75 percent of the institutions participating in the Football Bowl Subdivision must agree.
Consolidation
In the original text of the PCSA, conferences reporting more than $1 billion in revenue on fiscal year 2025 tax returns would be prohibited from merging or consolidating, acquiring assets, media rights, or membership of another conference. Currently, only the Big Ten Conference and the Southeastern Conference would be subject to these restrictions. These two conferences have expanded membership in the past 15 years. During the markup session on June 18, this revenue cap was lowered to $700 million, which adds the Atlantic Coast Conference to the list of conferences prohibited from merging or consolidating. In other words, the current alignment of conferences would largely be frozen, and with no sunset provision in the legislation, it is unclear how long this would last.
The bill also explicitly states that efficiencies, procompetitive effects, or any other defense under antitrust laws can be used to justify expansion.
The Risks of PCSA
While the PCSA may fulfill its mandate to restore order in college athletics and protect women's and Olympic sports, it risks doing so at the expense of competition. In using targeted antitrust exemptions to restore the power of the NCAA, conferences, and CSC, and preempting state NIL laws, the PCSA could limit the compensation of student athletes and coaches and conferences from becoming more efficient.
By codifying the House settlement, compensation of student athletes would be directly tied to revenue-sharing and spending caps. Furthermore, the fair market value mandate of NIL deals could lower prospective earnings. The PCSA could also risk inhibiting competition among institutions for student athletes and coaches. Restricting student athletes' ability to transfer multiple times without penalty could limit a student athlete's ability to sell their talent to competing programs. For coaches, prohibiting penalty-free mid-season transfers results in the same dampening of competition for talent.
The restrictions on conferences merging, consolidating, or absorbing institutions from other conferences would halt market-driven realignment. While the intent is to prevent the creation of a super-conference, it could solidify the position of the largest conferences. Moreover, institutions that are members of smaller conferences may have reduced incentives to invest in their athletic programs knowing they cannot be absorbed by larger conferences to acquire more lucrative media deals.
The provision expanding the Sports Broadcasting Act of 1961 that would shield pooled media rights from antitrust litigation could create comparable competitive concerns involving the National Football League (NFL) currently being scrutinized by the House Subcommittee on the Administrative State, Regulatory Reform, and Antitrust.
The combination of pooled media rights and frozen conferences would likely limit competition for media rights. Today, the big four major conferences - Big Ten, Southeastern Conference, Atlantic Coast Conference, and Big 12 - and other conferences negotiate separately with broadcasters. This drives down prices and fosters innovation in the packaging and distribution of content. The ability of conferences to negotiate collectively would give these institutions and conferences greater leverage over broadcasters and other viewing platforms. The collective negotiations would likely result in more revenue for these institutions and conferences - and help protect women's and Olympic sports - but come at the expense of consumers in the form of higher prices passed on by the increased cost to broadcasters.
What Can Congress Do?
Antitrust exemptions, by definition, provide protections for activity that would otherwise be considered illegal. As noted earlier, Justice Kavanaugh argued that the NCAA's business model would be "flatly illegal in almost any other industry in America." Relying on antitrust exemptions requires the ability to predict how markets would look in the future. There are several antitrust exemptions, including the Sports Broadcasting Act of 1961, that are being reconsidered.
Rather than reinstating the NCAA's authority to impose anticompetitive rules, Congress could establish national rules for NIL deals and compensation, transfers, and recruiting.
The antitrust exemptions, specifically those involving media rights, would likely give institutions and conferences increased market power that would ultimately be paid for by consumers.
* * *
Fred Ashton is the Director of Competition Policy at the American Action Forum.
* * *
Original text here: https://www.americanactionforum.org/insight/the-pcsa-fumbles-the-competition/
[Category: Think Tank]
American Action Forum Issues Commentary: ERISA's Important But Limited Role in Health Care Cost Containment
WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Health Care Policy Director Michael Baker:
* * *
ERISA's Important but Limited Role in Health Care Cost Containment
Executive Summary
* Rising health care costs have brought renewed attention to the Employee Retirement Income Security Act of 1974 (ERISA) as policymakers and advocates look for new ways to address increasingly expensive employer-sponsored coverage.
* Leveraging requirements under ERISA appears attractive because other cost-containment efforts have had limited success, making ... Show Full Article WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Health Care Policy Director Michael Baker: * * * ERISA's Important but Limited Role in Health Care Cost Containment Executive Summary * Rising health care costs have brought renewed attention to the Employee Retirement Income Security Act of 1974 (ERISA) as policymakers and advocates look for new ways to address increasingly expensive employer-sponsored coverage. * Leveraging requirements under ERISA appears attractive because other cost-containment efforts have had limited success, makingthe statute seem like a potential avenue for influencing a large share of private health coverage.
* ERISA is a benefit-plan governance statute, however, not a price-control law; pursuing broader cost-containment agendas using ERISA authority would not address hospital prices, physician payment, prescription drug prices, or the broader structural forces that drive health care spending.
-
Introduction
Employer-sponsored insurance sits at the center of the American health care system. It is the most common form of health insurance in the United States, covering 53.8 percent of the total population for at least part of the year. KFF estimates that employer-sponsored insurance covers 154 million people under age 65, while average annual premiums in 2025 reached $9,325 for single coverage and $26,993 for family coverage. Those figures help explain why employer coverage has become a natural target for policymakers concerned about affordability: It is large, expensive, and directly connected to workers' wages, household budgets, and employer compensation decisions.
These pressures have led to renewed interest in the Employee Retirement Income Security Act of 1974 (ERISA). Because ERISA governs much of the legal framework for private-employer benefit plans, it can appear to offer an existing federal pathway for addressing problems in a market that has proven difficult to discipline through other reforms. Policymakers have struggled for years to slow spending growth through transparency initiatives, insurance regulation, payment reforms, competition policy, and targeted interventions in the pharmaceutical and provider markets. Against that backdrop, some have argued that ERISA should be updated, interpreted more aggressively, or used more directly to address the rising cost of employer-sponsored health coverage.
There may be reason to examine whether ERISA is functioning as effectively as it should in today's health care market. ERISA plans are either self-funded or fully insured. A self-funded plan is defined as an arrangement where the employer collects premiums from employees (the covered population) and is directly responsible for paying the resulting medical claims. Employers that self-fund coverage usually establish relationships with third-party administrators (TPAs), independent intermediary organizations that manage self-funded health plans by processing medical, dental, and vision claims, and managing provider networks. In turn, TPAs establish contractual networks to provide this coverage. Approximately 60 percent of ERISA plans are self-funded. Fully insured ERISA plans are those where an employer purchases insurance coverage for employees directly from an insurer. Around 40 percent of ERISA plans are fully insured.
As evidenced by the differentiation above, employers now depend on complex contractual relationships with insurers, TPAs, pharmacy benefit managers (PBMS), brokers, consultants, and other vendors. Employers or plan sponsors, fiduciaries, and other contractual actors may not always have sufficient visibility into compensation arrangements, claims data, rebate flows, network pricing, or other information necessary to evaluate whether a plan is being administered prudently. Reforms that improve disclosure, restrict gag clauses, and clarify vendor compensation can therefore serve a legitimate purpose within ERISA's existing framework.
Yet there is a difference between improving ERISA's operation in the health plan context and transforming ERISA into a general health care cost-containment statute. The statute is fundamentally concerned with benefit-plan governance: disclosure, fiduciary conduct, claims administration, plan oversight, and federal uniformity. It was not designed to regulate hospital prices, physician payment, prescription drug prices, or the broader structural forces that drive health care spending. Policymakers can strengthen ERISA where it naturally applies, particularly around transparency and fiduciary oversight, but using it as a substitute for broader health care cost strategy risks pushing the statute beyond its proper role while leaving the underlying cost drivers largely untouched.
What Is ERISA?
ERISA is one of the foundational statutes governing private employee benefits in the United States. Its name can be misleading in the health policy context. While ERISA is often discussed today in association with employer-sponsored health plans, the statute was born primarily out of a retirement-security crisis. Congress enacted ERISA after years of concern that workers could spend decades earning promised pension benefits only to find, at retirement, that the money was unavailable, inadequately funded, or poorly protected.
The most cited historical catalyst was the 1963 collapse of the Studebaker pension plan in South Bend, Indiana. When Studebaker terminated its employee pension plan, more than 8,500 workers lost some or all of their expected pension benefits, an episode that came to symbolize the vulnerability of private pensions before federal reform. The broader problem was not simply one failed company, however. It was that private benefit plans had grown into a central part of workers' economic security without a sufficiently comprehensive federal framework to ensure disclosure, prudent management, funding discipline, and enforceable rights.
ERISA was the culmination of earlier federal efforts to oversee employee benefit plans, including the Welfare and Pension Plans Disclosure Act of 1958, which required employers to disclose information about pension plans, and which gave the Department of Labor a role in overseeing those benefits. But ERISA was designed to go further.
At its core, ERISA sets minimum federal standards for most voluntarily established private sector retirement and health plans. It requires plans to provide participants with information about plan features and funding; imposes fiduciary obligations on those who manage plans and plan assets; establishes claims and appeals procedures; gives participants a right to sue for benefits and fiduciary breaches; and, for defined-benefit pension plans, created federal protections through the Pension Benefit Guaranty Corporation. Since its enactment, ERISA has been amended repeatedly to reflect changing retirement and health benefit needs, but its basic architecture remains rooted in benefit-plan governance.
ERISA does not require employers to offer benefits, nor does it prescribe the precise terms of every benefit package. Instead, it regulates the administration of benefit plans once employers choose to offer them. An employer may decide whether to sponsor a plan, what type of plan to offer, how generous that plan should be, and whether to amend or terminate it, subject to other applicable legal constraints. ERISA then governs how the plan is administered, how participants are informed, how assets are handled, and how fiduciaries discharge their duties.
Those fiduciary duties are among ERISA's most important features. Fiduciaries must act solely in the interest of plan participants and beneficiaries, for the exclusive purpose of providing benefits and paying reasonable plan expenses. They must act prudently, follow plan documents that are consistent with ERISA, avoid conflicts of interest, and ensure that plan assets are not misused. In the retirement context, these duties naturally focus on investment selection, fees, diversification, and the protection of plan assets. In the health plan context, they apply to plan administration, service-provider oversight, claims processes, and the handling of plan resources.
How Health Care Fits In
Although ERISA is widely associated with pensions and retirement security, the statute's treatment of employer-sponsored health coverage as an "employee welfare benefit plan" extends its scope to private-sector plans that provide medical, surgical, hospital, prescription drug, disability, and other welfare benefits. This means that when an employer chooses to sponsor a health plan, that plan is generally subject to ERISA's federal rules governing reporting, disclosure, fiduciary responsibilities, claims procedures, and enforcement rights. ERISA therefore supplies much of the legal architecture for employer-sponsored health coverage, even though it was not enacted primarily as a health care statute.
This understanding is important because ERISA regulates the administration of the plan, not the health care system surrounding it. The statute does not generally require an employer to offer health benefits, dictate every covered service, regulate provider prices, or set the price of prescription drugs. Instead, it establishes standards for how a plan must be operated once it exists. Participants must receive certain information about their coverage; fiduciaries must act prudently and in the interest of participants and beneficiaries when managing the plan; and beneficiaries must have access to claims and appeals processes when coverage is denied. In this sense, ERISA's health care role is procedural and fiduciary rather than directly regulatory of prices or delivery.
Over time, Congress has used ERISA as one vehicle for applying broader health coverage protections to employer plans. Requirements related to Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation of health coverage, Health Insurance Portability and Accountability Act of 1996 (HIPAA) portability, mental health parity, Affordable Care Act market plans, surprise billing protections, and more recent transparency obligations have all been layered onto ERISA-covered group health plans. Those additions demonstrate that ERISA is not irrelevant to health policy. But they also reinforce the statute's proper role: ERISA is a framework for plan governance, participant protections, and uniform administration of employer-sponsored benefits. It can help ensure that health plans are administered fairly and transparently, but it is not, by design, a mechanism for controlling the underlying cost of health care.
ERISA Preemption and State Actions
ERISA preemption is one of the statute's most important features for employer-sponsored health coverage. In broad terms, ERISA preempts state laws that "relate to" employee benefit plans, while preserving state authority to regulate insurance. That balance has always been especially important for self-insured employer health plans, which as noted above are the primary type of ERISA plan: States may regulate insurers and insurance products, but they generally may not treat self-funded ERISA plans as insurers to impose state insurance regulation on them. The result is a federal floor and a federal framework for plan administration, designed to allow multistate employers to operate benefit plans without navigating a separate set of state rules in every jurisdiction. As the map illustrates, however, the status of federal ERISA preemption is at risk of fragmenting across the country.
States have increasingly pursued laws that may weaken this federal preemption, particularly affecting pharmacy benefit managers, claims-data reporting, reimbursement rules, network requirements, and other policies intended to affect health care costs. Some of these laws may be framed as general health care or insurance regulation, while others more directly affect how ERISA plans are administered. Consider a large employer with employees in 30 or 40 states that sponsors a single self-funded health plan. Without ERISA's preemption framework, that employer could be required to administer different versions of the same plan depending on where each employee lives or receives care. One state might require specific claims-data reporting, another might impose unique pharmacy reimbursement rules, another might mandate different appeal procedures, and another might restrict how the plan contracts with third-party administrators or pharmacy benefit managers. Even if each state policy is well-intentioned, the cumulative effect could be a fragmented compliance regime layered on top of an already complex national health plan.
Realistic Future State
There are some things ERISA can do to support employers providing health care coverage, though. ERISA can support better information, better governance, and better accountability. For example, it is reasonable to ask whether plan fiduciaries have sufficient information to evaluate the compensation paid to third-party administrators, PBMs, brokers, consultants, and other service providers. It is reasonable to prohibit contractual gag clauses that prevent plan sponsors from accessing claims data, provider-specific cost information, or quality information. It is reasonable to require service providers to disclose direct and indirect compensation so that plan fiduciaries can evaluate whether arrangements are reasonable and whether conflicts of interest exist.
Those kinds of reforms fit comfortably within ERISA's design. They strengthen the ability of employers and fiduciaries to manage plans prudently and may create pressure for better contracting and more informed purchasing. They are also consistent with the idea that fiduciaries should have enough information to assess the reasonableness of plan expenses and the quality of services provided to the plan.
But that is different from asking ERISA to solve health care affordability directly. The major drivers of health care costs often sit outside ERISA's core institutional reach. Hospital operations, provider market power, physician employment trends, site-of-care incentives, drug development costs, insurance benefit mandates, tax implications of employer coverage, utilization patterns, public program payment rules, and state insurance regulation all influence what employers and workers ultimately pay. ERISA touches some of these dynamics only indirectly. It may shape how a plan contracts services, but it does not determine the underlying structure of the health care market.
Given these realities, stretching ERISA beyond its statutory design could create unintended consequences. If ERISA fiduciary duty is interpreted as a broad obligation to secure the lowest possible health care prices, employers could face open-ended litigation risk for complex benefit design and contracting decisions. Courts would be asked to second-guess plan design choices, network arrangements, formularies, cost-sharing structures, and vendor contracts in markets where there may be no single clearly correct answer. That could encourage more defensive plan administration, greater reliance on outside vendors, narrower benefits, increased cost-shifting to workers, or reduced employer willingness to offer generous coverage.
The distinction between fiduciary administration and employer plan design is therefore essential. Under ERISA, fiduciaries must act prudently, loyally, and in the interest of participants and beneficiaries when administering a plan or managing plan assets. But employers also act as plan sponsors. In that capacity, they make business decisions about whether to offer benefits, what kind of benefits to offer, how generous those benefits should be, and whether to amend or terminate a plan. Those decisions may have enormous consequences for workers, but they are not automatically fiduciary decisions. Treating every cost-related choice as a fiduciary matter would blur a line that ERISA itself has long recognized.
The recent attention to PBMs and prescription drug benefit management illustrates both the promise and the limits of ERISA-based reform. PBM contracts can be opaque, and employer plan sponsors may not always have a clear view of rebate arrangements, spread pricing, pharmacy reimbursement, administrative fees, formulary incentives, or the true net cost of prescription drugs. Better disclosure in this area could be valuable. It could help fiduciaries understand whether vendor compensation is reasonable, whether incentives are aligned, and whether the plan is receiving the value it expects. At the same time, PBM transparency is not the same thing as prescription drug cost containment. Disclosure can improve oversight, but does not by itself determine drug prices, accelerate generic or biosimilar competition, or restructure the pharmacy supply chain.
ERISA may be one relevant statute for employer-sponsored plans, but it should not become a substitute for more targeted policy. A balanced approach would recognize ERISA's value without overstating its capacity. Policymakers should ensure that plan fiduciaries can access the information they need, evaluate service-provider compensation, review plan performance, and fulfill their obligations to participants. They should also be cautious about using ERISA as a backdoor mechanism for broader health policy goals that the statute was not designed to achieve.
Conclusion
Improving health care affordability is a significant challenge for policymakers. Employers are frustrated, workers are paying more, and the health care system rarely produces prices that are transparent, predictable, or disciplined by normal market forces. But the seriousness of the problem does not mean every available statute is equally suited to solve it. ERISA is a governance statute for employee benefit plans. It can help improve the process by which plans are administered and overseen, help ensure that participants receive information, rights, and remedies, and help fiduciaries ask better questions of the vendors they hire.
But ERISA cannot easily substitute for a coherent health care cost-containment strategy. It was not written to regulate provider markets, set prices, restructure incentives, or redesign the health care delivery system. Policymakers and advocates should therefore be careful not to ask ERISA to carry more than it can bear. The better course is to strengthen ERISA where it naturally applies - transparency, fiduciary process, disclosure, and plan governance - while addressing the underlying drivers of health care costs through other statutes and policies designed for that purpose.
* * *
Michael Baker is the Director of Health Care Policy at the American Action Forum
* * *
Original text here: https://www.americanactionforum.org/insight/erisas-important-but-limited-role-in-health-care-cost-containment/
[Category: Think Tank]
* * *
ERISA's Important but Limited Role in Health Care Cost Containment
Executive Summary
* Rising health care costs have brought renewed attention to the Employee Retirement Income Security Act of 1974 (ERISA) as policymakers and advocates look for new ways to address increasingly expensive employer-sponsored coverage.
* Leveraging requirements under ERISA appears attractive because other cost-containment efforts have had limited success, making ... Show Full Article WASHINGTON, July 1 -- The American Action Forum issued the following commentary on June 30, 2026, by Health Care Policy Director Michael Baker: * * * ERISA's Important but Limited Role in Health Care Cost Containment Executive Summary * Rising health care costs have brought renewed attention to the Employee Retirement Income Security Act of 1974 (ERISA) as policymakers and advocates look for new ways to address increasingly expensive employer-sponsored coverage. * Leveraging requirements under ERISA appears attractive because other cost-containment efforts have had limited success, makingthe statute seem like a potential avenue for influencing a large share of private health coverage.
* ERISA is a benefit-plan governance statute, however, not a price-control law; pursuing broader cost-containment agendas using ERISA authority would not address hospital prices, physician payment, prescription drug prices, or the broader structural forces that drive health care spending.
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Introduction
Employer-sponsored insurance sits at the center of the American health care system. It is the most common form of health insurance in the United States, covering 53.8 percent of the total population for at least part of the year. KFF estimates that employer-sponsored insurance covers 154 million people under age 65, while average annual premiums in 2025 reached $9,325 for single coverage and $26,993 for family coverage. Those figures help explain why employer coverage has become a natural target for policymakers concerned about affordability: It is large, expensive, and directly connected to workers' wages, household budgets, and employer compensation decisions.
These pressures have led to renewed interest in the Employee Retirement Income Security Act of 1974 (ERISA). Because ERISA governs much of the legal framework for private-employer benefit plans, it can appear to offer an existing federal pathway for addressing problems in a market that has proven difficult to discipline through other reforms. Policymakers have struggled for years to slow spending growth through transparency initiatives, insurance regulation, payment reforms, competition policy, and targeted interventions in the pharmaceutical and provider markets. Against that backdrop, some have argued that ERISA should be updated, interpreted more aggressively, or used more directly to address the rising cost of employer-sponsored health coverage.
There may be reason to examine whether ERISA is functioning as effectively as it should in today's health care market. ERISA plans are either self-funded or fully insured. A self-funded plan is defined as an arrangement where the employer collects premiums from employees (the covered population) and is directly responsible for paying the resulting medical claims. Employers that self-fund coverage usually establish relationships with third-party administrators (TPAs), independent intermediary organizations that manage self-funded health plans by processing medical, dental, and vision claims, and managing provider networks. In turn, TPAs establish contractual networks to provide this coverage. Approximately 60 percent of ERISA plans are self-funded. Fully insured ERISA plans are those where an employer purchases insurance coverage for employees directly from an insurer. Around 40 percent of ERISA plans are fully insured.
As evidenced by the differentiation above, employers now depend on complex contractual relationships with insurers, TPAs, pharmacy benefit managers (PBMS), brokers, consultants, and other vendors. Employers or plan sponsors, fiduciaries, and other contractual actors may not always have sufficient visibility into compensation arrangements, claims data, rebate flows, network pricing, or other information necessary to evaluate whether a plan is being administered prudently. Reforms that improve disclosure, restrict gag clauses, and clarify vendor compensation can therefore serve a legitimate purpose within ERISA's existing framework.
Yet there is a difference between improving ERISA's operation in the health plan context and transforming ERISA into a general health care cost-containment statute. The statute is fundamentally concerned with benefit-plan governance: disclosure, fiduciary conduct, claims administration, plan oversight, and federal uniformity. It was not designed to regulate hospital prices, physician payment, prescription drug prices, or the broader structural forces that drive health care spending. Policymakers can strengthen ERISA where it naturally applies, particularly around transparency and fiduciary oversight, but using it as a substitute for broader health care cost strategy risks pushing the statute beyond its proper role while leaving the underlying cost drivers largely untouched.
What Is ERISA?
ERISA is one of the foundational statutes governing private employee benefits in the United States. Its name can be misleading in the health policy context. While ERISA is often discussed today in association with employer-sponsored health plans, the statute was born primarily out of a retirement-security crisis. Congress enacted ERISA after years of concern that workers could spend decades earning promised pension benefits only to find, at retirement, that the money was unavailable, inadequately funded, or poorly protected.
The most cited historical catalyst was the 1963 collapse of the Studebaker pension plan in South Bend, Indiana. When Studebaker terminated its employee pension plan, more than 8,500 workers lost some or all of their expected pension benefits, an episode that came to symbolize the vulnerability of private pensions before federal reform. The broader problem was not simply one failed company, however. It was that private benefit plans had grown into a central part of workers' economic security without a sufficiently comprehensive federal framework to ensure disclosure, prudent management, funding discipline, and enforceable rights.
ERISA was the culmination of earlier federal efforts to oversee employee benefit plans, including the Welfare and Pension Plans Disclosure Act of 1958, which required employers to disclose information about pension plans, and which gave the Department of Labor a role in overseeing those benefits. But ERISA was designed to go further.
At its core, ERISA sets minimum federal standards for most voluntarily established private sector retirement and health plans. It requires plans to provide participants with information about plan features and funding; imposes fiduciary obligations on those who manage plans and plan assets; establishes claims and appeals procedures; gives participants a right to sue for benefits and fiduciary breaches; and, for defined-benefit pension plans, created federal protections through the Pension Benefit Guaranty Corporation. Since its enactment, ERISA has been amended repeatedly to reflect changing retirement and health benefit needs, but its basic architecture remains rooted in benefit-plan governance.
ERISA does not require employers to offer benefits, nor does it prescribe the precise terms of every benefit package. Instead, it regulates the administration of benefit plans once employers choose to offer them. An employer may decide whether to sponsor a plan, what type of plan to offer, how generous that plan should be, and whether to amend or terminate it, subject to other applicable legal constraints. ERISA then governs how the plan is administered, how participants are informed, how assets are handled, and how fiduciaries discharge their duties.
Those fiduciary duties are among ERISA's most important features. Fiduciaries must act solely in the interest of plan participants and beneficiaries, for the exclusive purpose of providing benefits and paying reasonable plan expenses. They must act prudently, follow plan documents that are consistent with ERISA, avoid conflicts of interest, and ensure that plan assets are not misused. In the retirement context, these duties naturally focus on investment selection, fees, diversification, and the protection of plan assets. In the health plan context, they apply to plan administration, service-provider oversight, claims processes, and the handling of plan resources.
How Health Care Fits In
Although ERISA is widely associated with pensions and retirement security, the statute's treatment of employer-sponsored health coverage as an "employee welfare benefit plan" extends its scope to private-sector plans that provide medical, surgical, hospital, prescription drug, disability, and other welfare benefits. This means that when an employer chooses to sponsor a health plan, that plan is generally subject to ERISA's federal rules governing reporting, disclosure, fiduciary responsibilities, claims procedures, and enforcement rights. ERISA therefore supplies much of the legal architecture for employer-sponsored health coverage, even though it was not enacted primarily as a health care statute.
This understanding is important because ERISA regulates the administration of the plan, not the health care system surrounding it. The statute does not generally require an employer to offer health benefits, dictate every covered service, regulate provider prices, or set the price of prescription drugs. Instead, it establishes standards for how a plan must be operated once it exists. Participants must receive certain information about their coverage; fiduciaries must act prudently and in the interest of participants and beneficiaries when managing the plan; and beneficiaries must have access to claims and appeals processes when coverage is denied. In this sense, ERISA's health care role is procedural and fiduciary rather than directly regulatory of prices or delivery.
Over time, Congress has used ERISA as one vehicle for applying broader health coverage protections to employer plans. Requirements related to Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation of health coverage, Health Insurance Portability and Accountability Act of 1996 (HIPAA) portability, mental health parity, Affordable Care Act market plans, surprise billing protections, and more recent transparency obligations have all been layered onto ERISA-covered group health plans. Those additions demonstrate that ERISA is not irrelevant to health policy. But they also reinforce the statute's proper role: ERISA is a framework for plan governance, participant protections, and uniform administration of employer-sponsored benefits. It can help ensure that health plans are administered fairly and transparently, but it is not, by design, a mechanism for controlling the underlying cost of health care.
ERISA Preemption and State Actions
ERISA preemption is one of the statute's most important features for employer-sponsored health coverage. In broad terms, ERISA preempts state laws that "relate to" employee benefit plans, while preserving state authority to regulate insurance. That balance has always been especially important for self-insured employer health plans, which as noted above are the primary type of ERISA plan: States may regulate insurers and insurance products, but they generally may not treat self-funded ERISA plans as insurers to impose state insurance regulation on them. The result is a federal floor and a federal framework for plan administration, designed to allow multistate employers to operate benefit plans without navigating a separate set of state rules in every jurisdiction. As the map illustrates, however, the status of federal ERISA preemption is at risk of fragmenting across the country.
States have increasingly pursued laws that may weaken this federal preemption, particularly affecting pharmacy benefit managers, claims-data reporting, reimbursement rules, network requirements, and other policies intended to affect health care costs. Some of these laws may be framed as general health care or insurance regulation, while others more directly affect how ERISA plans are administered. Consider a large employer with employees in 30 or 40 states that sponsors a single self-funded health plan. Without ERISA's preemption framework, that employer could be required to administer different versions of the same plan depending on where each employee lives or receives care. One state might require specific claims-data reporting, another might impose unique pharmacy reimbursement rules, another might mandate different appeal procedures, and another might restrict how the plan contracts with third-party administrators or pharmacy benefit managers. Even if each state policy is well-intentioned, the cumulative effect could be a fragmented compliance regime layered on top of an already complex national health plan.
Realistic Future State
There are some things ERISA can do to support employers providing health care coverage, though. ERISA can support better information, better governance, and better accountability. For example, it is reasonable to ask whether plan fiduciaries have sufficient information to evaluate the compensation paid to third-party administrators, PBMs, brokers, consultants, and other service providers. It is reasonable to prohibit contractual gag clauses that prevent plan sponsors from accessing claims data, provider-specific cost information, or quality information. It is reasonable to require service providers to disclose direct and indirect compensation so that plan fiduciaries can evaluate whether arrangements are reasonable and whether conflicts of interest exist.
Those kinds of reforms fit comfortably within ERISA's design. They strengthen the ability of employers and fiduciaries to manage plans prudently and may create pressure for better contracting and more informed purchasing. They are also consistent with the idea that fiduciaries should have enough information to assess the reasonableness of plan expenses and the quality of services provided to the plan.
But that is different from asking ERISA to solve health care affordability directly. The major drivers of health care costs often sit outside ERISA's core institutional reach. Hospital operations, provider market power, physician employment trends, site-of-care incentives, drug development costs, insurance benefit mandates, tax implications of employer coverage, utilization patterns, public program payment rules, and state insurance regulation all influence what employers and workers ultimately pay. ERISA touches some of these dynamics only indirectly. It may shape how a plan contracts services, but it does not determine the underlying structure of the health care market.
Given these realities, stretching ERISA beyond its statutory design could create unintended consequences. If ERISA fiduciary duty is interpreted as a broad obligation to secure the lowest possible health care prices, employers could face open-ended litigation risk for complex benefit design and contracting decisions. Courts would be asked to second-guess plan design choices, network arrangements, formularies, cost-sharing structures, and vendor contracts in markets where there may be no single clearly correct answer. That could encourage more defensive plan administration, greater reliance on outside vendors, narrower benefits, increased cost-shifting to workers, or reduced employer willingness to offer generous coverage.
The distinction between fiduciary administration and employer plan design is therefore essential. Under ERISA, fiduciaries must act prudently, loyally, and in the interest of participants and beneficiaries when administering a plan or managing plan assets. But employers also act as plan sponsors. In that capacity, they make business decisions about whether to offer benefits, what kind of benefits to offer, how generous those benefits should be, and whether to amend or terminate a plan. Those decisions may have enormous consequences for workers, but they are not automatically fiduciary decisions. Treating every cost-related choice as a fiduciary matter would blur a line that ERISA itself has long recognized.
The recent attention to PBMs and prescription drug benefit management illustrates both the promise and the limits of ERISA-based reform. PBM contracts can be opaque, and employer plan sponsors may not always have a clear view of rebate arrangements, spread pricing, pharmacy reimbursement, administrative fees, formulary incentives, or the true net cost of prescription drugs. Better disclosure in this area could be valuable. It could help fiduciaries understand whether vendor compensation is reasonable, whether incentives are aligned, and whether the plan is receiving the value it expects. At the same time, PBM transparency is not the same thing as prescription drug cost containment. Disclosure can improve oversight, but does not by itself determine drug prices, accelerate generic or biosimilar competition, or restructure the pharmacy supply chain.
ERISA may be one relevant statute for employer-sponsored plans, but it should not become a substitute for more targeted policy. A balanced approach would recognize ERISA's value without overstating its capacity. Policymakers should ensure that plan fiduciaries can access the information they need, evaluate service-provider compensation, review plan performance, and fulfill their obligations to participants. They should also be cautious about using ERISA as a backdoor mechanism for broader health policy goals that the statute was not designed to achieve.
Conclusion
Improving health care affordability is a significant challenge for policymakers. Employers are frustrated, workers are paying more, and the health care system rarely produces prices that are transparent, predictable, or disciplined by normal market forces. But the seriousness of the problem does not mean every available statute is equally suited to solve it. ERISA is a governance statute for employee benefit plans. It can help improve the process by which plans are administered and overseen, help ensure that participants receive information, rights, and remedies, and help fiduciaries ask better questions of the vendors they hire.
But ERISA cannot easily substitute for a coherent health care cost-containment strategy. It was not written to regulate provider markets, set prices, restructure incentives, or redesign the health care delivery system. Policymakers and advocates should therefore be careful not to ask ERISA to carry more than it can bear. The better course is to strengthen ERISA where it naturally applies - transparency, fiduciary process, disclosure, and plan governance - while addressing the underlying drivers of health care costs through other statutes and policies designed for that purpose.
* * *
Michael Baker is the Director of Health Care Policy at the American Action Forum
* * *
Original text here: https://www.americanactionforum.org/insight/erisas-important-but-limited-role-in-health-care-cost-containment/
[Category: Think Tank]