Congress was not very productive last year. But there were a few significant accomplishments, all reflecting input from the NCPA. For instance:

• The most important part of last summer's pension bill includes 401(k) reforms developed by the NCPA and the Brookings Institution. Employers can now automatically enroll employees in 401(k) plans with diversified portfolios. In return, employers receive safe harbor against lawsuits as well as regulatory relief. The result: more workers will save and their account balances will be larger and safer.
• The idea of the Roth IRA came from the NCPA and was included in the "Contract with America." The concept of Roth accounts — allowing after-tax deposits and tax-free withdrawals — is expanding. Employers can now offer their employees Roth 401(k)s. And in 2010 all taxpayers, regardless of income, will be able to convert their regular IRAs into Roth IRAs.
• And in one of its final acts of the year, Congress gave a boost to the NCPA's idea of Health Savings Accounts (HSAs) by allowing larger deposits and making the rules more flexible.
• Congress had a few "near misses" with the estate tax and energy security. The House voted to allow energy companies to drill offshore from New England to Alaska, but the measure stalled in the Senate. Then when the estate tax issue appeared imminent, Senators Frist and Kyl circulated our study on wealth and inheritance in their effort to garner votes for repeal.

For the next two years, many are predicting stalemate because of divided government. However, at the NCPA we are optimistic that significant progress is possible. Although there are no guarantees, NCPA experts are working with members of both parties to foster:

• Social Security reform that includes future benefit cuts and voluntary private accounts that will be technically separate from Social Security.
• Tax and regulatory relief to encourage individually-owned, portable health insurance for early retirees.
• Entrepreneurial solutions to increase quality and decrease costs in Medicare and Medicaid.

Any one of these would represent a huge shift in public policy.

To help us prepare for the challenges ahead, Robert D. McTeer, Jr. has joined the NCPA as a Distinguished Fellow. Dr. McTeer most recently served as chancellor of the Texas A&M University System, and before that as president of the Federal Reserve Bank of Dallas. He is highly regarded for his ability to translate complicated economic concepts into common sense.

We also have secured funding for the Kellye Wright Samuelson Fellowship in Health Care Economics to promote a patient-centered health care delivery system. A search is underway to find a distinguished scholar with a strong background in free-market health care reform.

The NCPA will welcome new interns as we expand our advanced internship program. The internship program motivates and educates young people, instills civic responsibility, promotes an avid awareness of current policy issues and teaches interns how public policy makes a difference in the civic and business worlds. Today's young people are our nation's future leaders, and we want to make sure they have an understanding and respect for our country, its traditions and its institutions.

This year we will continue our strategy of aggressive media outreach. Thanks in part to this marketing strategy, our ideas were heard or read 276 million times in 2006 — an advertising value of more than $10.3 million. Some of our major successes include:

• With our new Health Care Rapid Response Initiative, our health policy ideas were heard or read 94.2 million times through the media, and our consumer-driven health care Web site, cdhc.ncpa.org, received more than a million hits.
• Through the E-Team, our Environmental and Energy Rapid Response Initiative, NCPA environmental ideas were heard or read more than 47.9 million times. NCPA experts and opinions appeared in such places as Fox News, CNN Money, Forbes.com, CNBC-TV , New York Times, The Wall Street Journal, Newsweek and more.
• The NCPA also made an impact with Congressional testimonies, such as E-Team Adjunct Scholar David Deming's recent testimony that "there is a bias in the media that has bloomed into global warming hysteria," as well as my testimony on ways to improve consumer-driven health care to reduce costs and improve the quality of care.
• NCPA Chairman of the Board Gov. Pete du Pont is a regular columnist on www.opinionjournal.com, the editorial page of The Wall Street Journal Web site. Entitled Outside the Box, Mr. du Pont's columns discuss current public policy and political matters.

The enclosed report provides a more in-depth look at the NCPA's recent work and goals for the future. Thank you so much for your continuing support of our significant and timely work.

Warm regards,

John Goodman
President

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