With your support, the National Center for Policy Analysis (NCPA) had an impactful first quarter. More people are hearing about our ideas every day. NCPA Web sites are averaging an unprecedented one million visits per month, and NCPA ideas were heard or read more than 56 million times during the first quarter - an advertising value of $12.3 million.

Many are predicting stalemate for the next two years because of divided government. However, at the NCPA we continue to be optimistic that significant progress is possible, although there are no guarantees. In January, Sen. Ted Kennedy (D-MA) invited me to participate in a roundtable of the Senate Health, Education, Labor and Pension Committee. On the House side, Rep. Charlie Rangel (D-NY) invited me to testify before the Ways and Means Committee on the need to update our aging institutions, including personal and portable health insurance, tax relief for those who purchase insurance on their own, and a more flexible employee benefit system.

One area where progress is possible is health care. In his State of the Union address, President Bush made health care his highest domestic policy priority and endorsed a series of ideas long favored by the NCPA. Among these:

• Create a level playing field for individual purchase and employer purchase of health care under the tax law;
• Cap tax subsidies for health insurance so that people cannot keep on lowering their taxes by overspending on health care; and
• Allow the states to use their charity care dollars to subsidize private insurance instead of encouraging people to drop their private coverage to get free care.

Using free care dollars in this way means coordinating spending and tax policies. If done right, we do not need additional spending in order to insure the uninsured. This idea was first introduced by the NCPA 15 years ago in Patient Power. Last fall, Governor Mitt Romney told me that this NCPA idea formed the core of

his Massachusetts health reform plan. It is also the core idea behind Governor Arnold Schwarzenegger's California health reform plan, and is being considered in Texas and many other states. 

Of course, there are many features of the Massachusetts plan we do not like, and there are even more objectionable features in the Schwarzenegger plan. To help people sort the good from the bad from the ugly, we are putting together a handbook on state health reform.

Not all NCPA supporters care about health care, but almost all realize that health care spending is on a course to drastically affect everything they do care about. Do you think that one in every six dollars is too much to spend on health care? Consider how much worse it can be. A new NCPA study by Texas A&M economists Andrew Rettenmaier, Liqun Liu and Zijun Wang finds that for people over 75 years of age, more than half of all they consume is health care! In less than 20 years, half of everything all seniors consume will be health care.

It's no surprise health costs are rising in a system where doctors and hospitals don't compete for patients on the basis of price or quality. Unlike other markets, prices for health care are difficult to obtain and often meaningless when they are disclosed. I coauthored a study with NCPA Senior Fellow Devon M. Herrick, The Market for Medical Care: Why You Don't Know the Price; Why You Don't Know about Quality; And What Can Be Done about It. The answer: empower patients and create real markets.

President Bush's idea of an ownership society could also be beneficially extended to environmental concerns. In a cutting-edge study, Protecting the Environment Through the Ownership Society - Part Two, Senior Fellow H. Sterling Burnett, shows how the government mismanagement of our natural resources has led to degraded public lands and fisheries. Extending the ownership society concept to these areas could effectively improve things.

Of course, the environmental issue of the moment is global warming. The NCPA is preparing a chart book for lay readers - to shed reason and light on this highly emotional subject. Also, Burnett has been in the newspapers and on TV providing a useful alternative to alarmist rhetoric on this issue. His work was recently praised by Sean Hannity to listeners of his nationally-syndicated radio show.

In a letter to the NCPA, Baroness Margaret Thatcher reaffirmed the bond between our two countries and the importance of standing together against our enemies. The Rt. Hon. David Davis, Shadow Home Secretary and member of the British Parliament, hand carried the letter and read it in his presentation to our NCPA Hatton W. Sumners Distinguished Lecture series luncheon in March. At the inaugural luncheon of the 2007 series in February, Pulitzer Prize-winning columnist Charles Krauthammer gave a wide-ranging analysis of the two political parties and U.S. foreign and domestic policy.

The Economic Policy Forum & Author Series is also off to a strong start this year. Gene Heck led off the 2007 series in January, discussing his book, Building Prosperity: Why Ronald Reagan and the Founding Fathers Were Right on the Economy. Richard Miniter, investigative journalist and New York Times bestselling author of Losing bin Laden and Shadow War, continued the Series in February. He discussed his latest book, Disinformation: 22 Media Myths That Undermine the War on Terror. Charles Murray, author of The Bell Curve, spoke in April and signed copies of his most recent work, In Our Hands: A Plan to Replace the Welfare State.

As you can see, we've had a very productive first quarter. Thank you for your role in the NCPA's continued success. We could not have achieved all this without your help. Look at the enclosed report to read more about what your continuing support has helped us accomplish.

Warm regards,

John Goodman President

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