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May 3, 2011 Make TIAA-CREF Ethical campaign Update


As we are six months from the last TIAA-CREF annual meeting, and about six months until the next one, I am sending this update on new developments and ongoing efforts:

I continue with T-C work, but at a much lower level than previously. We do, however, have two very active members in the Make TIAA-CREF Ethical campaign:

Jim Keady and Educating for Justice, working on Nike to end use of sweatshops (www.educatingforjustice.org; www.teamsweat.org). Killer Coke, headed by Ray Rogers (www.killercoke.org), working to reform some socially irresponsible policies/actions by Coca-Cola.

We are still looking for an individual or group to take leadership of our coalition. Collectively, over a quarter century, we have influenced many positive changes in T-C and can continue to do so. Our standard campaign message (Section C, below) provides details. And, as always, forwarding that message and acting on the proposed actions are helpful. Thanks.

Please note several efforts that are not a part of the campaign but are trying to influence T-C on issues of social justice.

  • One, Investors Against Genocide, has already been successful (with some assitance from us) in moving T-C to divest from companies involved in the Sudan (www.investorsagainstgenocide.net).

  • Another campaign, which is fairly new, is trying to get "TIAA-CREF to stop investing in companies that pro?t from the Israeli occupation of the Gaza Strip and the West Bank, including East Jerusalem." (www.jewishvoiceforpeace.org/tiaa-cref).
  • Finally, see the information below (Section A) about joining the Faculty No-Sweat Network. It is obviously quite relevant to our coalition interests about Nike and will further our efforts.

In early November, T-C announced a new social venture capital investment in energy efficiency and green building technology. We had long lobbied T-C to do social venture capital (direct investment in a company rather than in a company's stock). See http://www.tiaa-cref.org/public/about/press/about_us/releases/pressrelease363.html.

Spurred by faculty allies at CUNY, the American Federation of Teachers (AFT) passed two resolutions urging T-C to do better on human/labor rights issues, and specifically to get tougher with three of their portfolio companies that we have long highlighted, Wal-Mart, Coke, and Nike. Unfortunately, after passing the resolutions, AFT has essentially acquiesced to T-C's statements that those three companies have made good progress on human/labor concerns. Some of our coalition members--experts on those companies-assert that little or no substantive changes have been made. See Section B below for our correspondence (slightly edited) with AFT. Please write AFT or get your faculty/staff/colleagues elsewhere to contact them on this matter. It will surely help our effort.

Finally, "something completely different" which deals with socially responsible investment (SRI), but does not pertain to T-C. Section D below includes an op-ed, a brief policy paper, and a related letter a different coalition sent to Obama's deficit commission. It promotes prevention (in many budget areas) to both lower the federal deficit and benefit society. Regarding SRI, now coming available are "social impact bonds," where individuals and the private sector can take some of the burden of prevention funding (see a brief description here http://en.wikipedia.org/wiki/Social_impact_bond. Feel free to pass along the below pieces. I have talked extensively with researchers, organizations, agencies, and Congressional aids in trying to bring this into policy--with some interest. If you want to get involved, let me know--or write your elected officials about these possibilities. Thanks.

Goodbye for now and thanks for your continuing efforts,

Neil Wollman (for the Make TIAA-CREF Ethical coalition) (www.makeTiaa-crefEthical.com)

A) Faculty No-Sweat Network

Dear Colleagues,

We write to ask you to join us in an important progressive enterprise: the formation of a Faculty No-Sweat Network committed to promoting justice for the workers who sew university clothing. We've already achieved an important breakthrough, as we'll describe below, but we need to sustain and expand this important victory. To do that, we need your help.

We hope you will agree to take two initial steps: 1) respond to this email and tell us you would like to participate in the network and continue to receive communications from us, and 2) help spread the word about the new Alta Gracia label, the first collegiate clothing brand ever to pay a living wage to workers and welcome unionization.

As you know, thanks to committed activism by students and faculty, almost every university and college in the country now has a labor code that applies to the brands (like Nike, Reebok and Russell Athletic) that make university logo clothing. Many of these universities have joined the Worker Rights Consortium (WRC), an independent labor rights organization that helps enforce these codes by investigating working conditions in factories around the world that make university products. Thanks to extraordinary efforts by the WRC, student activists, and faculty members like yourselves, we have recently achieved some astonishing breakthroughs:

We are proud that faculty played important roles in both of these campaigns - helping to challenge the misinformation circulated by the companies and their defenders, supporting the work of student activists on our campuses, and working to convince campus administrators to take a strong stand in support of workers' rights. Our goal is to expand and strengthen this vital faculty involvement through the creation of the Faculty No-Sweat Network.

We are asking you to do something none of us can ever recall asking colleagues to do before: help create brand recognition for a new apparel brand that is being launched this fall. Alta Gracia Apparel, named after the town in the Dominican Republic where the factory is located, is the first apparel brand committed to making its products in a factory

The Alta Gracia label is a brand of Knights Apparel, the largest maker of collegiate clothing. It shows that it is possible to make high quality, affordable apparel, while paying decent wages and guaranteeing humane working conditions. If this happens, it will raise the bar for the entire apparel industry worldwide. No longer will major clothing brands and their apologists be able to argue that sweatshop conditions are necessary to compete in the global economy.

This will only happen, however, if the brand is successful. It is now on sale at more than 200 universities. The challenge now is to market it successfully to students, faculty, and college alumni - to make the Alta Gracia label as recognizable and hip as the Nike swoosh. That is where you can help out.

If your school already sells an Alta Gracia t-shirt or sweatshirt, please buy one (or both!). It would also be great - assuming you are comfortable doing so - if you would wear the t-shirt or sweatshirt and tell your students about it. (The Alta Gracia website www.altagraciaapparel.com has a list of schools carrying the product.) We would also encourage you to write a column for your campus newspaper urging students, faculty, alums, and others to purchase the Alta Gracia items and explain why it is important. It might also be helpful to co-author the column with a student or a sympathetic administrator. We would be pleased to draft the column for you, so just let us know.

If your school does not carry them, please urge your business officer to do so. (There was recently an excellent article about Alta Gracia in the New York Times that could be helpful.)

You will never have a better opportunity to make a purchase that will make a political difference.

Please let us know by return email that we can add your name to the new Faculty No-Sweat Network, and take the extra step to model the Alta Gracia label. It is an excellent opportunity to educate students about the dynamics of apparel production - and the possibility of changing them.

REPLY to rich@isber.ucsb.edu

Sincerely yours,

Richard Appelbaum, MacArthur Chair in Global & International Studies and Sociology, UCSB
Mark Anner, Professor of Labor Studies and Political Science, Penn State University
Eileeen Boris, Hull Chair in Women's Studies, UCSB
Kate Bronfenbrenner, Director of Labor Education Research, Cornell University
Michael Burawoy, past president, American Sociological Association; Professor, UC Berkeley
Bob Bussel, Director, Labor and Education Research Center, University of Oregon
Tracy Chang, Director, Labor Program, Department of Labor Studies and Employment Relations, Rutgers University
Dan Clawson, Professor, Sociology, University of Massachusetts-Amherst
Jane Collins, University of Wisconsin
Altha Cravey, Institute of Latin American Studies, UNC
Hector Delgado, Professor, Sociology, University of LaVerne, Sociology
Peter Dreier, Dr. E.P. Clapp Distinguished Professor of Politics, Occidental College
Peter Evans, Professor, Sociology, UC Berkeley
Catherine Fiske, Founding Faculty, School of Law, UC Irvine
Richard Freeman, Herbert Ascherman Chair in Economics, Harvard University
Gary Gereffi, Sociology and Center for Latin American and Caribbean Studies, Duke University
Mark Golub, Assistant Professor of Politics and International Relations, Scripps College
Tom Hayden, Visiting Professor, Scripps College
Kent Wong, Director, Center for Labor Research
David James, Professor, School of Cinematic Arts, USC
Robin Kelley, Professor of American Studies and Ethnicity, USC
Margaret Levi, Jere L. Bacharach Professor of International Studies, University of Washington-Seattle
Nelson Lichtenstein, MacArthur Chair in History, UCSB
John Logan, Senior Labor Policy Specialist, Labor Center, UC Berkeley
Susan Orr, Chair, American Democracy Project, SUNY Brockport
Ruth Milkman, Associate Director, Joseph S. Murphy Institute for Worker Education and Labor Studies, The Graduate Center, CUNY
Manuel Pastor, Director, Program for Environmental and Regional Equity, USC
Laura Pulido, Professor of American Studies and Ethnicity and Geography, USC
Robert Ross, Director of International Studies Stream and Professor, Clark University
Gay Seidman, Professor, Sociology, University of Wisconsin-Madison
Harley Shaiken, Director, Center for Latin American Studies, UC Berkeley
Andrew Schrank, Graduate Chair and Advisor, Sociology, University of New Mexico
Chris Tilly, Director, Institute for Research on Labor and Employment, UCLA
Margaret Weir, Professor, Political Science and Sociology, UC Berkeley
Kent Wong, Director, Center for Labor Research and Education, UCLA
Helena Worthen, Professor, School of Labor & Employment Relations, University of Illinois Urbana - Champaign

B) Letter from the Make TIAA-CREF Ethical coalition to the American Federation of Teachers:

Dear AFT President Weingarten:

I have been involved with a number of other profs for over twenty five years in trying to get TIAA-CREF to be more socially responsible in its investing and other practices. Our combined work has led to many successful changes along these lines. Most recently we have been trying to get TIAA-CREF to get tougher with Wal-Mart, Coca-Cola, and Nike on issues of labor/human rights, after getting them to begin discussions with those companies. We worked with the CUNY PSC to get a resolution introduced concerning this through AFT. Thanks to AFT for that. But TIAA-CREF has just not done all it can along the lines of that and a follow-up resolution was required. In their Policy Statement on Corporate Governance, TIAA-CREF mentions a number of things they can do to influence their portfolio companies, including collective action, regulatory relief, and litigation, among others.

Unfortunately, all they have done is talk and talk and talk with those companies, with few results. Yet in a very recent release/document on their web site (see link below), they make the below statement, which is patently false (actually, I do not know what the objectives were, but certainly the changes have not been substantive). In our Make TIAA-CREF Ethical Coalition (MakeTIAA-CREFethical.com) , we have experts regarding those three companies who can attest to that (likely the three most knowledgeable folks around regarding those companies as regards social responsibility). I hope you are open to talking to those experts, and trying to take a tougher stand with TIAA-CREF to take a tougher stand with these companies. If you are looking to really strengthen labor standards in corporate America, influencing these corporate leaders will go along way toward that. I am willing to talk anytime, Neil

P.S. For a while I had contact with ……. of AFT on these matters and he seemed to "get" the situation, but has not responded of late to me, though voices openness to our ideas . I am hoping AFT might take things further. Thanks

Response from AFT:

Dear Professor Wollman:

Thank you for writing to President Weingarten regarding your groups concerns with the way TIAA-CREF interacts with some of the companies it holds in its various investment portfolios. President Weingarten asked me to respond to your e-mail. We have entered into discussions with TIAA-CREF on a number of corporate governance issues and feel progress is being made. We appreciate your offer of assistance and will call upon you in the days ahead should the need arise. Thank you again for your interest and offer of assistance

My last correspondence, after which I received no further communication:

Thanks for responding, but I don't understand how you can say progress is being made with TIAA-CREF regarding the three companies that are specifically mentioned in the AFT resolutions. I feel I must say that is it not better to ask some folks who regularly monitor those companies rather then TIAA-CREF, which must monitor thousands of companies and just has not been as forthcoming as they could be regarding those companies? So far, only talk from those companies and in this case, TIAA-CREF, as well. Can't you at least listen to our experts on these companies one time? Where is the harm in that? What is the fear of that? AFT represents teachers and teachers who value information exchange and finding the truth. Give a chance for that here.

Thanks,
Neil

C) TIAA-CREF ETHICAL COALITION" ASKS: IS YOUR INVESTMENT REALLY GOING TOWARD THE "GREATER GOOD"?

Dear Professor/Staff Member/Concerned Stakeholder,

It's morning in America--- do you know where your pension fund assets were last night?

Would it upset you to know that TIAA-CREF (TC) ---the nation's largest retirement fund---is a major investor in companies like Wal-Mart, Nike, Costco, and Coca-Cola? Millions of TIAA-CREF participants are contributing their money to support abusive human and labor rights practices, destruction of the environment, and harming of human health.

We don't want our investment-

It's time for faculty, staff, and students on campuses (and other stakeholders) across America to tell TIAA-CREF it must use its considerable shareholder power to influence these corporations for the better--or stop investing in them. Our work is starting to pay off, but we have a long way to go. TC has now told us that they have been talking with Coca-Cola, Wal-Mart, and Nike. Unfortunately, they have been talking with Coke since 2006, with no substantive changes. That's far more than enough time to give Coke. It's time for TC to do more than just "talk" with these companies. And, indeed, TC lists such tactics as collective action, regulatory relief, and litigation, among others, in its Policy Statement on Corporate Governance. Why list them if they are not used? After further lobbying, an August '08 press release from TC states "Engagement is a multi-step process. TIAA-CREF believes that we should explore the ways in which to influence the companies' behavior and thereby help bring about positive social change." Yet in talking with them since then, they have explicitly said they will not go beyond talking and possible/occasional shareholder resolution work in dealing with companies it engages. Let us hold them to what they said earlier, and what is the right thing to do.

Working through a school system chapter (CUNY), we helped get the 1.4 million strong American Federation of Teachers to pass resolutions demanding TC to do better on human/labor/civil rights (http://www.aftface.org/storage/face/documents/10-14-09_aft_resolution_tiaa-cref.pdf).

What can you do? Let's turn up the heat on CREF to truly invest for the "greater good." Help us educate the faculty, staff, and students on your campus and nationwide. Email this message to others at your school and elsewhere. (We also have an op-ed that can be distributed to listservs, academic/administrative publications, organizations, schools, etc.)

All of us need to:

Ask us for our op-ed that you can submit to your campus or faculty/staff newspaper or elsewhere

www.makeTIAA-CREFethical.com

nwollman@bentley.edu

Neil Wollman; Ph. D.; Senior Fellow, Bentley Alliance for Ethics and Social Responsibility; Bentley University; Waltham, MA, 02452; NWollman@Bentley.edu; 260-568-0116

Sprawl-Busters, Press for Change,Campaign to Stop Killer Coke/Corporate Campaign, Inc.,Campaign for a Commercial-Free Childhood, Social Choice for Social Change, Citizens Coalition (Frente Civico), Educating for Justice, National Community Reinvestment Coalition, United Students Against Sweatshops, Canadian Committee To Combat Crimes Against Humanity (CCCCH), Corporate Accountability International (formerly Infact), World Bank Bonds Boycott

Make TIAA-CREF Ethical is a project of the Bentley Alliance for Ethics and Social Responsibility; Bentley University.

D) A Gaping Omission in The Deficit Commission Report: An Ounce of Prevention to Lower the Deficit and Benefit Society

Neil Wollman and Abigail A. Fuller

One sensible strategy has been virtually absent from recent proposals to reduce the federal deficit, including the most important, the Simpson-Bowles deficit commission. We need to prevent the problems in the first place that are eating up federal revenues. We could reduce the need to just "raise taxes/cut programs" if we invested in preventing problems like illness and crime before they happen. There already exist well-tested "evidence-based programs" that address social problems and typically start saving money within three to ten years.

If we sufficiently fund programs to cut the high school drop-out rate by 50 percent, we could add $30 billion in federal revenues annually. Fewer drop outs mean higher employment rates (hence more tax revenue) and less teenage pregnancy, drug use, poverty, and crime. Prisoner rehabilitation programs are proven to lower recidivism rates and criminal justice expenses, which can cut into the cost of crime's aftermath that currently exceeds $1 trillion annually. Similarly, it is far cheaper to prevent substance abuse than to pay for its consequences, which cost $360 billion annually. Funding early childhood programs for vulnerable populations would result, by 2050, in an estimated federal and state budget savings of $61 billion annually, an increase of $107 billion in the gross domestic product, and crime-related savings of $155 billion (in 2004 dollars).

Pollution control, waste control, and energy conservation save money. Every dollar spent in disaster prevention, including reinforcing infrastructure, saves $7, on average, when calamity strikes-in addition to boosting jobs and the economy. Armed conflicts can sometimes be forestalled at a small fraction of the expense of war by using "preventive defense," "preventive diplomacy," or conflict management techniques.

Finally, widespread initiation of good practices in childhood rearing, wellness, exercise, nutrition, and public health campaigns can dramatically save in budget-busting health care costs. One analysis found that interventions like "end-of-life" discussions, nurse follow-ups, and diabetes prevention instruction could save $50 billion annually, mostly in federal dollars. If we can prevent obesity from rising above 2008 levels by using behavioral, medical, and legal interventions, federal and state governments could save an estimated $100 billion annually in health care costs by 2018. This does not include gains in worker productivity.

Given sufficient initial investment in and widespread implementation of prevention programs, the annual impact on the federal budget would increase over time, reaching hundreds of billions of dollars in savings and added revenues. This is a considerable sum in relation to the estimated savings from the Commission's proposals. Savings will be maximized if all government agencies explore these possibilities and new research is funded to identify additional areas for savings. We can start small, given current concerns about new spending: invest $5 billion annually for four years in various preventive programs. If subsequent evaluation finds a good cost-saving trajectory, then significantly more funds can be allotted. One exciting new possibility for funding prevention efforts are "social impact bonds," which enable the private sector to invest in governmental social service programs and reap part of the savings.

The Commission did recommend investing in education and infrastructure to promote economic growth. It also proposed a new "Cut-and-Invest Committee" to identify outdated, ineffective programs and recommend others for high-value investment. The Commission additionally noted two projects involving primary health care that have generated savings. These could be the seeds of a prevention model, which should have been given far more prominence in its deliberations. In fact, a letter promoting prevention was sent to the Commission by a sixteen member group, including the NEA, American Public Health Association, National Council of Women's Organizations, and American Human Development Project of the Social Science Research Council.

President Obama, along with Commission members and Budget Committee heads in the new Congress--Rep. Ryan and Sen. Conrad--intend to consult the Commission report as they begin work on budgetary matters. They should add prevention possibilities to the mix. Perhaps some Republican-supported program cuts might be accepted by Democrats if they anticipate a trajectory of investment in programs that promote social and medical welfare as well as save money-with Republicans amenable to some cost-saving investment. Everyone wants economic growth, which prevention investment can promote.

Tax increases and program cuts are bitter pills; prevention leads to greater well-being. Surely it is preferable to prevent a disease than treat it; to avoid an oil spill than to clean it up; to avoid prison or war. To benefit society while saving money is a hard combination to beat.

Neil Wollman, Ph. D. is Senior Fellow, Bentley Alliance for Ethics and Social Responsibility; Bentley University;NWollman@Bentley.edu; Abigail A. Fuller, Ph. D. is Associate Professor of Sociology, Manchester College, North Manchester, Indiana.

A Prevention Model for Reducing the Federal Deficit While Benefiting Society Neil Wollman

The growing federal debt has become such a looming problem that President Obama appointed a National Commission on Fiscal Responsibility and Reform to tackle it. So far, the public discourse has focused on two seemingly necessary solutions that are scorned by certain populations-raising taxes and cutting current government programs. If instead, far more funds were put upfront to prevent problems before they arise, future spending would be reduced, along with the need for as many taxes hikes and program cuts. Spending now will pay off later, often in five to ten years, but sometimes helping far in the future, when budget concerns will, of course, continue. This prevention model is primarily associated with health care (it is cheaper to prevent than treat an illness), but it could be applied across diverse budget sectors. Here are some examples.

Research indicates that, in general, investing in primary and early intervention yields the best outcomes for those at risk, as well as the best savings, by avoiding the high cost of treating adults who acquire problems. A study by RAND concluded that "high-quality early childhood programs can keep children out of expensive special education programs; reduce the number of students who fail and must repeat a grade in school; increase high school graduation rates; reduce juvenile crime; reduce the number of youngsters who wind up on welfare as adults; increase the number of students who go to college; and help adults who participated in the programs as children get better jobs and earn higher incomes" (link for abstract and link for full study ). For example, a 2005 analysis found that early childhood programs for vulnerable populations would dramatically increase long term savings; by 2050 there would be an annual federal/state government budget savings of $61 billion, a GDP increase of $107 billion, and a crime related savings of about $155 billion in 2004 dollars (link ). For every $1 invested in quality preschool education, $6 to $10 is gained from such items as tax revenues, reduced remedial help, and lower criminal justice costs (link ).

In education, preventing high school drop-outs could save in various ways. The GAO has identified the specific costs of dropping out of school: fewer employment opportunities, with resulting loss of tax revenue for government; greater tendency to engage in high-risk behaviors resulting in pregnancy, crime, and drug use; and drawing on social programs throughout one's lifetime ("School Dropouts: The Extent and Nature of the Problem" , cited in link ). Cutting high school dropout rates in half would increase government revenues annually by 45 billion dollars ("via extra tax revenues, reduced costs of public health, crime and justice, and decreased welfare payments"), with two thirds going to the Federal government ( link ). Effective practices for reducing dropout rates have been researched (link ).

The annual total cost of crime's aftermath well exceeds $1 trillion ( link , 1999 figures). Though much goes toward state/local/private aspects, hundreds of billions go towards federal expenses/revenues, making it ripe for potential savings (e.g., federal justice agencies, medical care for victims, drug trafficking, federal courts/corrections, and lost work days/taxes). The Washington State Institute for Public Policy ( link ) and the Blueprints Model Programs at the Center for the Study and Prevention of Violence (link) have identified effective and cost-savings programs that lower adult and juvenile crime rates, violence, and recidivism. Plus, the work of the former is now being funded and successfully utilized by the Washington state government, leading them to begin funding prevention measures in other areas.

Funds can also be saved by providing safety net services for needy populations--such as food, housing, and counseling. For example, recent testimony by the United Tenants of Albany showed that providing housing and onsite services for the homeless resulted in cost savings by "lowering the use of expensive emergency services like shelters, hospitals, prisons and psychiatric centers" that typically serve this population ( link ). A Health and Human services report states that "..the total financial cost of drug use disorders to the United States is estimated to be 180 billion dollars annually….and for alcohol abuse …184.6 billion dollars." The report notes a cost savings ratio of 7:1 by doing treatment, saving mainly in "reduced cost of crime and increased employer earnings" ( link ), though there are health care savings as well (Prevention Can Save on Health Care Costs; Center for Science in the Public Interest ). There is other relevant work ( link ; link ).

The defense budget presents other possibilities. Armed conflicts are extremely costly in weaponry, personnel, injury, and collateral damage to civilians and infrastructure. The Carnegie Commission on Preventing Deadly Conflict has gathered evidence that many armed conflicts can be avoided using "preventive defense," "preventive diplomacy," and conflict prevention and management. ( link ). Recent Congressional testimony by Lund and Schirch revealed that "cost ratios of prevention to war ranged from 1-1.3 to 1-479, an average of 1-59." ( link ). Hundreds of billions of dollars could be saved by the U.S. if one major war or multiple U.S.-resourced civil conflicts were averted.

Studies demonstrate the cost savings of environmental management techniques such as pollution control, waste control, and energy conservation ( link ; link ; link ; link ). Also, increased regulatory monitoring and technological improvements in industries should mean fewer oil spills and other environmental accidents, hence less spending on clean-up, repairs, and health care and economic aid for those effected. Preventive legislation like Cap and Trade can reduce greenhouse gases/global warming, reducing later costs related to health care, water shortages, disruption of economic activity, and so on. One analysis concluded that from now till 2050, the costs would be $600 billion to $1 trillion, but the benefits (some going to other countries), would be 1.5-$1.7 trillion ( link ). Additionally, every dollar spent in disaster prevention and infrastructure saves $7, on average, when the calamity strikes ("The Edge of Disaster: Rebuilding a Resilient Nation," Stephen E. Flynn). A recent report concluded that U.S investment in transportation infrastructure is so far behind other world powers that it will lead to "a steady erosion of the social and economic foundations for American prosperity in the long run." (link ).

Finally, there is health care, where we started, and where rising costs are enormous. In contrast to commonsense notions, research reviews conclude that there are only limited areas where traditional medical prevention has reliably cut costs ( link ; link ); however, there are many interventions that have been shown effective and perhaps some might yield further savings if explored more ( link ). Fortunately, though, behavioral interventions affecting health have proven effective and cost saving (link ). A recent analysis found that changes in childhood wellness/exercise/nutrition, child rearing practices, safety promotion, public education, and community actions can result in a healthier America (see link at left of page, link ). For example, "end-of-life," and ethics discussions, referrals to hospice care and palliative care, chronic and self-care management, short term transition interventions, nurse follow-ups with patients, and diabetes interventions could save, on average, $50 billion annually, with a large majority being federal related (link ). An estimated $200 billion could be saved annually by 2018 if 2008 obesity levels were maintained--about half by federal/state governments (mainly the former)--and this does not count revenue enhancement due to gains in productivity ( link ). And there are established legal and behavioral intervention means of reducing and maintaining weight loss (e.g., link ; link ; link ). The state of California, alone, saved around $4 billion annually, on average, over expected costs over the twenty year period it enacted an anti-smoking public education campaign and other policy changes (Prevention Can Save on Health Care Costs, Center for Science in the public Interest ). Beyond health care costs, the economic impact of the seven most common chronic diseases is enormous, amounting to $1.3 trillion annually, most due to lowered productivity (link ). Even modest lowering or just delaying onset of such diseases by proven prevention means would have significant economic advantages for the federal budget beyond obvious health care cost benefits.

As a word of caution, the Coalition for Evidence-Based Policy has found that much research is not rigorous and thus government programs have been established based on invalid or insufficient evidence. Thus it will be important to start with rigorously tested best-practices programs, pilot test less researched programs being considered, and to do regular evaluation of program effectiveness. Fortunately, though not looking specifically at the research cited here, the Coalition has analyzed well controlled studies showing that there are effective programs in many areas of work cited above (link ). And there now exist many other databases referencing successful "evidence-based programs" in both areas covered here and otherwise (e.g., successful interventions in lowering pregnancies, hospital visits/some health and well being problems, unemployment and lower wages, drop-out rates/ disciplinary problems/academic difficulties/learning and developmental disabilities/non-preparedness for school, substance abuse, violent and criminal behavior/recidivism, psychopathology, welfare needs/homelessness, environmental problems like energy waste, and dysfunctional parenting/family and life skills) (link , see documents linked at bottom of page; ( link , see links at top of page; link, see links to prevention research centers/institutes; link ). Different entities differently define what is "well-tested" and thus caveats just mentioned should be followed. But there are currently ample rigorously evaluated programs to move ahead. And the new area of "implementation science" will help this process ("research to translate evidence-based findings into common practice", link ). Targeting funds for new prevention-oriented research could reveal new cost-saving and effective measures in any number of sectors. Cohen, Neumann, and Weinstein present a health care model that can be applied to other sectors ( link ). It involves identifying and utilizing with larger populations what works now and might in the future, and identifying programs that should be eliminated due to ineffectiveness and cost.

An important advantage of prevention is that the need for cutting current government programs solely for financial reasons would be reduced. Some program cuts would be made as a natural consequence of reduced need, not just to save money. Prevention also generates higher levels of welfare and happiness: it is better not to get diabetes than to successfully treat it; to avoid an oil spill rather than clean it up; to stay out of prison rather than be rehabilitated; to not have a war.

Another factor in the equation is that obviously not all costs or programs are tied to the federal government and budget. Many are handled by the private sector or state and local governments. Thus, while costs will not be borne by the federal government, cost savings and positive effects on the debt will not directly accrue either. However, there are complex relationships between these sectors regarding program/budget/economic considerations, and there are still possibilities for debt reduction if the private/state/local government sectors also apply prevention. For example, private sector savings will benefit productivity and the general economy, with ramifications for the federal budget. Plus, more solvent states and cities will have lowered need for federal assistance. Besides the Washington state example above, Oregon now requires that significant funds spent by five state agencies must be effective and cost-saving, based on research, with one area being that of corrections (link ). Youth rehabilitated at the state level will not be a future financial burden on the federal justice system either (a model system in Missouri results in a recidivism rate of less than 8%, link ). Presumably other state prevention programs could similarly benefit the federal budget. Given some state deficits, initial outlays (even loans) by the federal government for prevention programs might induce their participation. Cayuga County in New York (link ; link ) and Palm Beach County in Florida have also successfully utilized evidence based programs (link).

Any proposal has downsides. For one, with fewer problems, less people will be needed to fix them, so jobs will be lost. (Of course, maintaining jobs to fix problems that need not be is not productive for the economy.) But new prevention jobs will be created, and efforts would be implemented over time, allowing for job relocation. Additionally, some sectors (like health care) may require extensive public education campaigns and "nudges" (Thaler and Sunstein) to induce preventive behavior (link). Also, though not technically a downside, prevention savings stated here or otherwise can not be merely added to find a grand total, as it will result in some double counting (e.g., savings made by some childhood interventions will alleviate potential problems/preventions/savings later in life for some). However, many cost-savings analyses state that their figures are conservative because there are other indirect savings not calculated because they deviate from the direct effects in their area of analysis. Finally, political opposition will arise from those against initial outlays or those who have vested interests in fixing problems rather than preventing them. As with health care reform, accommodations with these interests may be required to pass legislation. We need a strong Commission, President, and Congress to implement a prevention model, but it should have appeal across the political and ideological spectrums ( research indicates that opposed to some other ways tested, framing budgets in terms of prevention was appealing ( link ) and one survey found that 70% supported prevention provisions in the new health care law (link ). Perhaps the best hope lies in a diverse and vocal public which insists that government officials not lose an opportunity to lower tax increases and program cuts while still helping the budget situation.

There is no simple solution to the debt problem, but prevention can be a piece of the puzzle, perhaps a significant one, and with social benefits that alone are worth implementation (see the relevant article by Chris Norwood, who heads a health prevention institute, link ). Building over time, hundreds of billions of dollars can be saved or revenues added annually to the federal budget if there is sufficient up-front funding, widespread implementation of successful programs, a requirement for all budget areas to explore possibilities, and as funding designated for new research surely brings new areas for savings. Though a start, we will need far more, in many sectors, than the 15 billion dollars allotted over ten years to health care prevention (the "Prevention and Public Health Fund" of the new health care law). One Brookings study recommended spending $133 billion over five years, principally in various childhood programs ( link ).

We all apply prevention in our daily lives to ward off future problems, whether it saves money or not (brushing our teeth, getting car tune-ups, buying health insurance, e.g.). It seems rational to do so and It's time to do that as a nation and save money in the process.
Neil Wollman, Ph. D. is Senior Fellow, Bentley Alliance for Ethics and Social Responsibility; Bentley University; Waltham, MA, 02452; NWollman@Bentley.edu;

American Human Development Project, Health People,
the Prevention Saves Project, among others,
Release Open Letter to the National Commission on Fiscal Responsibility and Reform
Letter Urges Commission to Hold a Hearing on Investments in Prevention Today that will Provide
Significant Returns in Money Saved or Revenues Added Tomorrow

New York, NY - The American Human Development Project, the Prevention Saves Project, among 15 other partner organizations which include the National Education Association, the American Public Health Association, the National Council of Women's Organizations, and the Prevention Institute today sent an open letter to the National Commission on Fiscal Responsibility and Reform urging it to hold a hearing on prevention-based budgeting in which investments today provide significant returns in money saved or revenues added tomorrow-while also creating safer, more vibrant communities and a healthier, more productive workforce.

The letter includes a table outlining specific investments in prevention that would save hundreds of billions of dollars annually in the years ahead. A portion of the letter reads as follows and the full text may be accessed by clicking the attached file.

"In August 2010, the Congressional Budget Office estimated that the federal budget deficit will exceed $1.3 trillion for 2010. While the need for fiscal austerity is urgent, Congress must make forward-thinking decisions to ensure that short-term cuts will not harm our nation's long-term well-being and competitiveness in a global marketplace. We respectfully request that the Commission hold a hearing or expert meeting on the potential of investments in prevention to enhance the security of our financial future.

"Years of robust research tell us that prevention, in almost every instance-whether it be physical and mental health, education, criminal justice, environmental protection, or infrastructure-is less expensive and more effective than delaying action until the advent of a full-blown crisis. Furthermore, evidence is overwhelming that to build a 21st century workforce that draws on the talents of everyone in our society, we must invest in people-the real wealth of our nation in an era in which knowledge is paramount. Trimming excessive federal spending is vital, but so is investing in our collective future."

The letter was signed by the following organizations: American Federation of Teachers-Wisconsin; American Human Development Project of the Social Science Research Council; American Public Health Association; Bronx HIV CARE Network; Consortium of Social Science Associations; FirstStar, Putting Children First; Health People; Justice Policy Institute; National Council of Women's Organizations; National Education Association; National Law Center on Homelessness & Poverty; 9to5 National Association of Working Women; Peace and Justice Studies Association; Pennsylvania State Education Association; Prevention Institute; P$-The Prevention Saves Project; Psychologists for Social Responsibility; Society for Community Research and Action, Division 27 of the American Psychological Association.

October 7, 2010
National Commission on Fiscal Responsibility and Reform Eisenhower Executive Office Building 1650 Pennsylvania Avenue NW Washington, DC 20504

Dear Members of the Commission,

In August 2010, the Congressional Budget Office estimated that the federal budget deficit will exceed $1.3 trillion for 2010. While the need for fiscal austerity is urgent, Congress must make forward-thinking decisions to ensure that short-term cuts will not harm our nation's long-term well-being and competitiveness in a global marketplace. We respectfully request that the Commission hold a hearing or expert meeting on the potential of investments in prevention to enhance the security of our financial future.

Years of robust research tell us that prevention, in almost every instance-whether it be physical and mental health, education, criminal justice, environmental protection, or infrastructure-is less expensive and more effective than delaying action until the advent of a full-blown crisis. Furthermore, evidence is overwhelming that to build a 21st century workforce that draws on the talents of everyone in our society, we must invest in people-the real wealth of our nation in an era in which knowledge is paramount. Trimming excessive federal spending is vital, but so is investing in our collective future.

The attached sheet provides some examples of how targeted, pre-emptive investments in proven, evidence-based approaches can save hundreds of billions of dollars annually.1 This new form of prevention-based budgeting would produce savings for the federal government as well as for businesses, states, and local communities within five to ten years.

It is essential that our nation's policymakers start viewing the debt crisis through the lens of prevention, an area in which investments today provide significant returns in money saved or revenues added tomorrow-while also creating safer, more vibrant communities and a healthier, more productive workforce.

We thank you for your attention to this matter.
Sincerely,

American Federation of Teachers-Wisconsin + American Human Development Project of the Social Science Research Council + American Public Health Association + Bronx HIV CARE Network + Consortium of Social Science Associations + FirstStar, Putting Children First + Health People + Justice Policy Institute National Council of Women's Organizations + National Education Association + National Law Center on Homelessness & Poverty + 9to5 National Association of Working Women + Peace and Justice Studies Association + Pennsylvania State Education Association + Prevention Institute + P$-The Prevention Saves Project + Psychologists for Social Responsibility + Society for Community Research and Action, Division 27 of the American Psychological Association