Washington, D.C. — The Center for Medicare and Medicaid Innovation (CMMI) has failed to deliver on its core mission of lowering federal healthcare costs and improving care, according to a new report from the American Council for Capital Formation Center for Policy Research. The report, Testing Without Results: The Case for Rethinking the Center for Medicare and Medicaid Innovation, authored by ACCF Chief Economist and Executive Vice President Dr. Pinar Çebi Wilber and commissioned by the Council for Citizens Against Government Waste, finds that CMMI has increased federal spending, produced a low rate of successful model expansion, and continues to rely on projections that have significantly overstated taxpayer savings.

Created under the Affordable Care Act in 2010, CMMI was given $10 billion in mandatory funding every 10 years to test new payment and service delivery models for Medicare, Medicaid, and the Children’s Health Insurance Program. The Congressional Budget Office originally projected that CMMI would save taxpayers $2.8 billion from 2011 to 2020. Instead, CMMI increased net federal spending by $5.4 billion during that period and is projected to increase spending by another $1.3 billion between 2021 and 2030.

“CMMI was created to test new models that would lower costs and improve care, but after 16 years, the record shows the opposite,” said Dr. Çebi Wilber. “The program has not produced meaningful savings for taxpayers, and its limited success in expanding models nationwide raises serious questions about whether it can achieve its statutory purpose.”

The report finds that CMMI’s limited success is not simply a matter of implementation, but reflects deeper structural problems with how the program designs, evaluates, and expands its models. Since its inception, CMMI has tested 70 models, but only four have been certified for nationwide expansion — a success rate of just 5.7 percent.

The report’s topline findings include:

CMMI has increased federal spending rather than reduced it. CBO originally projected savings, but subsequent analysis found CMMI increased net federal spending by $5.4 billion from 2011 to 2020 and is projected to increase spending by $1.3 billion from 2021 to 2030.

Savings projections have repeatedly overstated the program’s benefits. CBO’s original estimate for reduced spending between 2011 and 2020 was $10.3 billion, but its 2023 analysis reduced that estimate to $2.6 billion.

Few models have succeeded. Out of 70 models tested since CMMI’s creation, only four have been certified for nationwide expansion so far.

Voluntary models create selection bias and require costly incentives. Because many models are voluntary, providers that expect to benefit financially are more likely to participate, making it harder to determine whether savings can be replicated systemwide.

Mandatory models carry financial risks and reduce flexibility. Mandatory participation can reduce selection bias, but it can also impose new risks on hospitals and providers already facing significant financial pressures.

Benchmarking problems distort savings estimates. The report finds that financial benchmarks can overstate savings by failing to account for changes in patient behavior, market conditions, coding practices, or broader healthcare trends.

Quality measurement remains difficult and inconsistent. CMMI’s efforts to measure quality improvements often rely on incomplete or burdensome data collection, making it difficult to determine whether models are truly improving care.

The report also evaluates possible future budget impacts based on CMMI’s past performance. Under a range of more realistic savings scenarios, the program does not produce taxpayer savings between 2024 and 2033. Instead, the report finds that CMMI’s net federal cost could range from roughly zero ($50 million), per CBO’s 2023 estimate, to as much as $8 billion in a worst-case scenario.

“At a time of rising healthcare costs, growing deficits, and mounting federal debt, taxpayers deserve programs that produce measurable results,” Dr. Çebi Wilber said. “CMMI’s goal is laudable, but 16 years should be long enough to demonstrate whether the program can deliver savings. Its failure to do so should prompt lawmakers to rethink whether these resources could be used more effectively.”

The report concludes that Congress and policymakers should reassess CMMI’s role, funding, and structure, particularly given its record of higher federal spending, limited model expansion, and uncertain future savings.

READ THE FULL REPORT: Testing Without Results: The Case for Rethinking the Center for Medicare and Medicaid Innovation 

The American Council for Capital Formation Center for Policy Research is a nonprofit, nonpartisan economic policy organization dedicated to educating the public about pro-growth policies that encourage saving and investment.

While the gig economy comes with its own benefits like flexibility, independence and supplemental income, it also has its own shortcomings, including the lack of benefits like health insurance, high self-managed tax burdens and, importantly, access to savings and retirement plans. 

Since the early 2000s, the U.S. personal savings rate has hovered around 5%, well below many other developed countries and far below China’s rate of more than 30%. That matters because savings provide a cushion for households while supplying capital for long-term investment and growth for the overall economy.

Our broader savings challenge can also be compounded by tax policy and the way the code treats different savings vehicles. For example, the tax code encourages retirement savings by allowing tax deferral for employer-provided accounts such as 401(k) plans. That is valuable for workers who have access to them. But policymakers should also consider Americans saving outside these plans and give them a better chance to keep and grow their investments.

One popular savings tool for Americans is mutual funds, which are investments that pool money from many investors to buy shares in a diversified portfolio of stocks, bonds or other securities. If these funds are held in taxable accounts, for example, outside tax-advantaged savings vehicles like 401(k) plans, they could incur annual taxes for the investor if any of the underlying investments in the fund are sold at a profit, even if the proceeds are reinvested, which are called phantom tax bills. 

At first sight, that might not look like a big deal, but when numbers are crunched, there is a different story.

By comparison, exchange-traded funds are baskets of securities that trade like stocks and often track an index, sector or asset. They can defer taxation through an in-kind redemption exemption when underlying investments are sold at a profit and proceeds are reinvested. According to a recent analysis, “the ETF tax efficiency has increased long-term investors’ after-tax returns by 1.05% per year relative to mutual funds in recent years.” The compounding impact of this extra percentage of return could translate into almost 11% higher balances over 10 years and 35% over 30 years.

This does not mean ETFs are bad. They reflect what the tax code should encourage: keeping savings intact until investors are ready to cash out. 

That is especially important for gig and independent workers saving outside retirement accounts, without the behavioral guardrails that help keep savings invested and growing.

As the U.S. Congress explores ways to help Americans increase savings, they turned attention to various policies, including the tax treatment of mutual funds. 

With an impressive show of bipartisanship in a highly partisan era, 44 Republican and 33 Democratic House members co-sponsored the GROWTH Act, which would allow mutual fund investors to defer the tax bill until the final sale of the funds and put these investment vehicles on an equal footing, ultimately helping savers and the U.S. economy.

During the rollout of Trump Accounts, Treasury Secretary Scott Bessent said these new savings vehicles can “turn compound growth into American greatness.” That same principle should guide every effort to modernize our savings policy. 

As more Americans build careers outside traditional employment models, Congress should ensure the tax code helps them grow their investments rather than penalizing them for saving. 

Passing the GROWTH Act would be a meaningful step toward helping workers keep more of what they earn, strengthen their financial futures, and unlock more of the capital our economy needs to grow. 

Despite their tremendous success, capital markets remain fragmented in nature and current regulations are failing to adapt for the benefit of everyday Americans’ retirement savings. For example, although private equity markets are booming, investment in these assets is undertaken by a limited group of investors, primarily institutional players and high-net-worth individuals, due to high investment minimums and regulatory requirements. The changing structure of the markets and the increasing prevalence of alternative investments signal the need for an improved regulatory environment to democratize these investments and expand their footprint to include small and large investors alike.

That was the theme of President Trump’s August 2025 Executive Order “Democratizing Access to Alternative Assets for 401K Investors.” The President’s focus on workplace retirement assets as a starting point was a smart move, as these savings vehicles represent the average American’s first encounter with investment options beyond interest-bearing accounts. We see that in data as well: In the late 1980’s, less than a third of U.S. households held stock. According to this year’s most recent data, approximately 62% of U.S. adults report owning stock, either directly or through retirement accounts like 401(k)s or IRAs. Past research shows that this growth in stock-owning households has occurred across all income quintiles. In fact, the most rapid growth has taken place among lower-income Americans: today nearly four in 10 stock-owning households have annual incomes of less than $50,000.

As the U.S. strives to increase its savings rate, American households deserve every tool to maximize those savings – including private equity. Multiple research projects show that compared to other market instruments, U.S. private equity generated the highest returns of any asset class over time horizons of 5-, 10-, 15-, and 20-years. Based on past experience, retirement savings vehicles are the right places to start due to their reach within the investment landscape.

Under the leadership of Acting Secretary Keith Sonderling, the Department of Labor is hard at work on improving the regulatory landscape within retirement accounts to expand the available investment options. For example, adopted in 1977, a regulation called the Prohibited Transaction Exemption (PTE-77-4) established a practical framework allowing investment managers to offer certain affiliated funds to retirement plans without violating ERISA’s prohibited transaction rules, which forbid fiduciaries from engaging in self-dealing or transactions between a plan and “parties in interest”. Its protections were – and remain – robust: no double fees, clear disclosures to plan fiduciaries, and independent fiduciary oversight. However, these regulations have not been updated to reflect today’s changing investment landscape and the variety of assets available that would benefit everyday investors. Without modernizing PTE 77-4, certain investment vehicles may remain off-limits to retirement plans even when they meet high standards of professional management, cost-effectiveness, and regulatory oversight due to the structural barriers unchanged since the Carter administration. Acting Secretary Sonderling has rightly identified this gap and signaled the Department’s intent to address it, which is a welcome step toward bringing retirement regulation in line with today’s markets.

Amending PTE 77-4 to encompass these alternative investment vehicles would not represent a departure from the exemption’s original purpose. On the contrary, it would be entirely consistent with the intent behind PTE 77-4 – ensuring that America’s nearly 100 million retirement savers can access professionally managed, appropriately safeguarded investment options that can capture the current growth happening in AI and data centers for their portfolio’s long-term benefit. An update would simply bring that intent into the modern era, reflecting today’s investment landscape while preserving the protections that have made the exemption effective for decades.

Opening a fully investible universe by removing the structural barriers that prevent retirement plans from accessing professionally managed strategies solely because of their organizational structure – not because of their quality, cost, or risk profile – should be the goal. Of course, preserving robust protections by maintaining fiduciary standards of care, the prohibition on double fees, disclosure requirements, and independent oversight should go hand-in-hand with expanding access. That way, we can align regulations with reality by enabling fiduciaries to evaluate investments based on what matters most – risk, cost, governance, and portfolio fit – rather than legal structure alone.

Today’s investment landscape is far broader and more dynamic than when many of ERISA’s implementing regulations were written. Retirement savers should not be limited to a fraction of the market simply because the rules were built around the products of a prior era. Broader access to diversified investment strategies is a proven tool for improving long-term outcomes – and all investors, not just institutional or wealthy investors, should benefit. Modernizing PTE 77-4 is the right step at the right time, and the Department of Labor has the opportunity to deliver it for the benefit of savers and investors throughout the economy.

Dr. Pinar Çebi Wilber is Chief Economist and Executive Vice President of the American Council for Capital Formation.

Dubbed as SECURE 1.0 and SECURE 2.0, two major legislative achievements within the span of four years, improved, among other things, small business access to retirement plans, increased retirement plan uptake via automatic enrollment and escalation, raised catch-up contribution limits for older workers, as well as increasing the required minimum distribution age. There were other provisions heralded by both experts and policymakers aimed at addressing financial security for future retirees and the emergency needs of current workers.

Today, bipartisan work on retirement policy is moving full speed ahead. The overarching goals of this work include introducing more flexibility, expanding access, and improving coverage of private retirement accounts, given the changing dynamics of the workforce.

One key area policymakers are focusing on is the changing capital markets landscape. Financial innovation brings new investment products to the markets; existing ones take on a different shape due to regulations and investor demands.

This changing landscape can have significant impacts through private retirement accounts. According to Investment Company Institute data, as of September 2025, total US retirement assets stood at $48.1 trillion. By comparison, total U.S. debt currently stands at $38.6 trillion.

Investment options for this size of assets can not only have significant impact on retirement security of the participants, but also on the overall U.S. economy. And of course, as this economic potential grows, so does the legislative and administrative attention paid to the composition of investments within private retirement accounts.

Investments in private retirement accounts represents the only interaction for many U.S. households with the public markets. In most cases, the focus of these accounts is publicly traded vehicles, avoiding alternative investments like private equity.

However, over the years the U.S. public markets have seen a stunted growth while private markets have been booming. Some attribute this lopsided change to heavy regulations around public companies in the US. And research has begun to focus on how an investment rebalancing in private retirement accounts to one that is more inclusive of private equity and new products like crypto can change the results for participants as well as the overall economy.

It is true that DC plans have access to the private equity through a few investment vehicles, such as collective investment trusts (CIT), that pool accounts by banks or trust companies and hold diverse portfolios including alternative investments. But heavy legal and litigation risks under ERISA’s fiduciary standards and SEC rules and regulations, among other issues, have kept the share of private equity in the plans low, somewhere around 0.1 percent of total DC investment assets, according to the Council of Economic Advisers (CEA).

And a landmark executive order last year entitled “Democratizing Access to Alternative Assets for 401(k) Investors” aims to change this by relieving “the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement.”

Recent research conducted by the CEA, for example, shows just the potential impact of expanding investments of private equity in defined contribution (DC) plans by between 5% and 30%. Their numbers show that this diversification could result in a GDP benefit of up to $35 billion, with younger cohorts benefiting more (a 2.5% increase in annuitized lifetime income) due to improved returns over longer investment spans.

When analyzed closely, even within DC plans, there seems to be a patchwork of investment options: For example, while 401(k) plans can invest in CITs, 403(b) plans designed for employees in health care, education, and other tax-exempt organizations effectively cannot, due to securities laws, despite the fact that SECURE 2.0. amended the tax code allowing the investment.

Congress is working on rectifying this issue. The Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act aims to bring the parity between 401k and 403(b) plans when it comes to CITs.

Like in every issue, there is some disagreement in terms of increasing the prevalence of alternative investments, like private equity, in the private retirement accounts. Naysayers point to bigger risks, potential liquidity problems and differences in fee structures. Supporters highlight the higher returns associated with increased risk.

This is where the professional management of these assets plays a key role by diversifying portfolios to create the right risk profile for individual investors. However, they also need guidance from legislators and regulators to make sure that their hands are not tied when optimizing portfolios for their clients within the retirement landscape.

Pinar Çebi Wilber is chief economist and executive vice president of the American Council for Capital Formation.

One is Europe’s attempt to change its saving and investment policies to put its future economic growth on a more sustainable path. Surprisingly, this endeavor borrows much from U.S. policy.

It is not surprising that the Draghi Report was a turning point for the EU, forcing them to recognize the Union’s desperate need for structural reform to catch up with the U.S. and China in every economic aspect. One area of specific interest is to create a financial ecosystem to address EU’s current challenges, such as rapid technological shifts and the new geopolitical dynamics. This will require the Union to come up with an additional investment of €750‑800 billion per year by 2030, to be used by small and medium-sized enterprises. Such an investment could not be achieved by banking sector alone.

With the goal of connecting household savings with productive investments, the EU is proposing to create EU Savings and Investments Accounts. These accounts aim not only to increase savings but also direct them away from low-yield investments that have been losing purchasing power over the years to more diversified capital market instruments, such as shares, bonds and investment funds. They are also envisioned to be paired with tax incentives to encourage uptake.

Does that sound familiar?

Despite naysayers and alarmists criticizing U.S. savings over the years, the country has been doing that over the years, and quite successfully. Defined Contribution plans, more commonly known as 401(k)s and IRAs, have become a staple for the large portion of U.S. households’ portfolios, not only preparing them for a secure financial future but also bolstering overall investment in the U.S. economy.

This is apparent in the EU’s current discussions. During consultations with member states to shape the EU’s proposed accounts, a cluster of responses focused on taxation, incentives and the portability of these accounts, praising American defined contribution plans for “their simplicity, digital accessibility and powerful tax advantages.”

The facts also point to the success of these plans. According to the Investment Company Institute’, Americans held $13.9 trillion in defined contribution retirement accounts and $18.9 trillion in IRAs at the end of September 2025. Just to put everything into perspective, contrast the almost $33 trillion wealth accumulated in these two types of accounts to the $39 trillion in national debt that has us all panicking. This saving has been achieved over the years by introducing the right policies, based on rigorous economic and behavioral research.

Following Nobel laureate Richard Thaler’s arguments of how humans are inherently prone to procrastination and the positive impact of nudges, two major retirement legislations, SECURE 1.0 and 2.0, have been instrumental in increasing savings through the introduction and expansion of automatic enrollment and escalation. Over the years, the data show that workers that have access to these plans are twice as likely to reach their retirement goals than those without.

In fact, according to a recent report by the Employee Benefit Research Institute, consistent participation in these accounts resulted in “an average account balance increase at a compound annual average growth rate of 15.8 percent from 2019 to 2023, rising from $82,274 to $148,092 at year-end 2023.”

This does not mean that everything is perfect. There is still much work to do to pull in people who do not have access to workplace retirement accounts or expand investment options within the plans. The administration and Congress are trying to do just that with creation of new tax advantaged accounts, like Trump Accounts, or trying to include alternative investment options such as private equity, or new products like crypto within defined contribution plans.

Recent research conducted by the Council of Economic Advisers, for example, shows the impact of increasing private equity in defined contribution plans by between 5 percent and 30 percent. Their numbers show that this diversification could result in a GDP benefit of up to $35 billion, with younger cohorts benefiting more (a 2.5 percent increase in annuitized lifetime income) due to improved returns over longer investment spans.

As they say, imitation is the sincerest form of flattery. Europe’s aspirations show how we have been on the right track when it comes to retirement savings. Over the years, the U.S. has benefitted immensely from its competitive capital markets, and retirement markets have been an integral part of this success story. We should build on this success with the right policy tools, adjusting the policy levers with market changes rather than revamping the entire system because of the occasional alarmist.

Pinar Çebi Wilber is executive vice president and chief economist for the American Council for Capital Formation.

At BlackRock’s 2026 Infrastructure Summit, government officials and private-sector leaders repeatedly emphasized the need to build more energy infrastructure to meet rising demand. Yet a growing obstacle is slowing that effort: relentless litigation that delays or stops energy and infrastructure projects altogether. A new report by the American Council for Capital Formation looks at various forms of ‘lawfare’ that have been used against projects or private firms, with the ultimate goal of making them uneconomical. Such litigation creates negative effects that ripple through every part of the economy.

There are three major avenues of litigation that have been heavily utilized: the strategic use of the existing laws, such as the National Environmental Policy Act (NEPA) and related permitting statutes to delay or halt project development, a growing wave of state and local climate liability actions, and legacy and coastal damage suits, as exemplified in Louisiana. While at first, their goals might seem unrelated, their end results are the same: Subpar infrastructure, an economy held back, higher prices and a widening affordability crisis.

Recent research by the Breakthrough Institute focuses on NEPA, a key law that requires agencies to study the environmental and social impacts of their actions before undertaking them. Between 2013 and 2022, 387 NEPA cases were brought before the U.S. appellate court system, resulting in an average delay of 4.2 years in project start dates. In a follow-up report, the Breakthrough Institute expanded the count of court cases to include over 1,400 cases filed in U.S. District and Circuit Courts and showed that a meaningful subset (7% of projects) of the projects remained in litigation for more than six years, reflecting a long tail of extended delays.

Even though there is no comprehensive economy-wide litigation cost analysis for cases conducted under NEPA, anecdotal evidence from delayed projects suggests lost economic value to affected economies, in addition to direct legal costs. For example, New England Clean Energy Connect (NECEC), a large-scale energy transmission project from Quebec to Massachusetts, was delayed due to litigation, costing Massachusetts taxpayers an extra $500 million due to inflation.

Climate litigation takes a different approach, directly targeting the companies rather than specific projects: A growing number of states, municipalities, nongovernmental organizations, environmental, and youth groups have filed lawsuits seeking damages for alleged climate-related harms under public nuisance, consumer protection, fraud, or deceptive practices theories. While these cases aim to shape public policy in favor of more ambitious climate action, the ultimate result is the strangling of the pool of capital needed for building infrastructure, by increasing legal costs, uncertainty, increased risk premiums, restricted financing, and lowering stock returns, as has been shown in the research.

And then there are the legacy/coastal damage lawsuits, which have outsized economic impacts at the state level, especially for the ones that rely heavily on targeted industries. For example, since 2013, more than 40 lawsuits have been filed by Louisiana parishes and state officials against over 200 oil and gas companies, alleging that decades of federally directed dredging, drilling, and pipeline construction contributed to coastal land loss. According to a recent report by the Pelican Institute, these lawsuits have translated into a steeper decrease in oil and gas employment in the state compared to the national average, 37% versus 24% since 2009. State mineral royalties also declined sharply: average annual collections fell from about $404 million (2009–2013) to $190 million since 2014, and cumulative receipts are roughly $2.1 billion versus about $4.4 billion if pre-2013 levels had persisted. These are funds and jobs desperately needed to build the infrastructure for Louisiana’s future.

The evidence demonstrates that lawfare has become a structural force shaping U.S. energy infrastructure development. Understanding how lawfare operates—and how it affects energy security, economic competitiveness, and national resilience—is essential to designing a durable legal and policy framework that supports environmental protection while enabling the U.S. to meet its rising energy demand and remain globally competitive.

Dr. Pinar Çebi Wilber is Chief Economist and Executive Vice President of the American Council for Capital Formation. 

Global Litigation Finance Market to Grow from $20 billion to
nearly $50 billion by mid-2023

Washington, D.C. — A new report from the American Council for Capital Formation (ACCF) Center for Policy Research finds that the increasing use of litigation to shape public policy—often referred to as “lawfare”—is becoming a growing economic force with significant consequences for U.S. energy development, infrastructure investment, and global competitiveness.  Litigation as Policy: The Economic Consequences of Modern Lawfare, authored by ACCF Chief Economist Dr. Pinar Çebi Wilber, finds that strategic lawsuits are increasingly used not only to enforce laws but also to influence policy outcomes outside the legislative and regulatory processes designed to govern energy and infrastructure development.

The report also examines how the broader litigation ecosystem has expanded rapidly in recent years and is projected to grow from roughly $20 billion in the mid-2020s to nearly $50 billion by the mid-2030s, reflecting increasing financial incentives to pursue large-scale lawsuits targeting industries and major infrastructure projects. At the same time, climate-related litigation has surged worldwide, with 1,936 climate-related cases filed in the United States alone as of mid-2025, more than in any other country.

“Litigation plays a critical role in enforcing laws and protecting environmental standards,” said Dr. Pinar Çebi Wilber, Executive Vice President and Chief Economist at ACCF. “However, when litigation becomes a substitute for policymaking, it can introduce significant uncertainty into investment decisions and delay the development of infrastructure that is essential for economic growth and energy security.”

Three major categories of litigation are identified as increasingly shaping the U.S. energy and manufacturing landscape:

• Permitting and environmental review litigation, particularly under the National Environmental Policy Act (NEPA);
• Climate liability lawsuitsfiled by states, municipalities, and advocacy groups seeking damages related to climate change; and
• Legacy environmental liability litigation, including coastal damage suits tied to historical energy activity.

Through case studies of pipelines, transmission infrastructure, and critical mineral projects, the report demonstrates how litigation can extend project timelines, increase financing costs, and create long-term uncertainty for investors—even after projects receive regulatory approval.

According to the report, this growing reliance on litigation introduces uncertainty into investment decisions, raises the cost of capital for major projects, and can delay critical infrastructure investments that underpin energy security and supply chains.  It identifies several measurable economic impacts associated with litigation-driven project delays:

• Litigation risk can reduce investment by 3–7 percent.Economic research shows firms facing heightened legal risk reduce capital spending and rely less on debt financing as a precautionary response.
• Energy infrastructure projects face years of delay from litigation.Analysis of environmental lawsuits shows energy projects experience an average 9-year delay due to legal challenges—even though agencies prevail in most cases.
• Environmental litigation is increasing significantly.Federal courts heard roughly 39 NEPA appeals cases annually between 2013 and 2022, a 56 percent increase compared to earlier periods.
• Most cases do not ultimately change regulatory outcomes.Agencies win about 80 percent of NEPA lawsuits, yet projects still face years of uncertainty while litigation proceeds.
• Legacy coastal litigation in Louisiana has created significant uncertainty for energy investment.Lawsuits seeking retroactive liability for historical energy activities have produced large verdicts and prolonged legal disputes, complicating long-term planning for offshore development and coastal restoration revenues tied to the state’s energy industry.
• Project delays can impose significant real-world costs.Litigation delaying the New England Clean Energy Connect transmission project increased costs for Massachusetts ratepayers by approximately $500 million due to inflation and schedule disruptions.

The report also highlights financial market effects associated with climate litigation. Research cited in the study shows that companies targeted by climate lawsuits experience an average 0.41 percent decline in stock returns following a filing or unfavorable decision, with even larger impacts for major fossil fuel producers.

“Even when projects ultimately prevail in court, years of litigation can raise costs, deter investment, and postpone the public benefits associated with energy and infrastructure development,” Dr. Wilber added. “Improving policy predictability—while maintaining environmental protections—will be essential to ensuring the U.S. can meet rising energy demand and remain globally competitive.”

READ THE FULL REPORT: Litigation as Policy: The Economic Consequences of Modern Lawfare

Your editorial “A Failed Climate Coup in the Courts” (Review & Outlook, Feb. 9) highlights an important issue that could have unintended consequences.

Over 3,000 climate change cases had been filed globally by mid-2025, more than 60% of which were being litigated in the U.S. As a recent United Nations Environment Program and Columbia University report states, “climate litigation may play a role in accelerating the adoption of mitigation and adaptation strategies and may lead to an increase in the ambition of such efforts.”

It is no secret that the President would like to build a state-of-the-art industrial defense base, to keep the country safe against any existing or emerging threats. The U.S. is already a global leader when it comes to defense companies: In 2025, 6 out of top 10 global defense companies were U.S. headquartered. Out of the top 100, 48 of them are from the United States. Given increased global competition, especially against the rising power of Chinese state-owned enterprises, it is not unfair to say that U.S. private firms are doing well, functioning under free market rules: making investment, producing output and making decisions on how to handle cash with the ultimate goal of maximizing the value for their shareholders. The president wants to change that goal by injecting prioritizing the “Nation’s warfighters” into the equation.

This is reminiscent of another discussion we have had over the past decade: how to inject Environmental, Social and Governance (ESG) goals into the decision-making process of public as well as private companies. Ultimately, the second Trump Administration stood firm against ESG, highlighting the importance of acting in the financial interest of investors in another executive order targeting “politically motivated” decision making. Ultimately, many big investment firms refocused “to protect and enhance long-term shareholder value on behalf of clients.” With the new executive order, the worry is that the U.S. investment and business community is facing another “ESG” in the form of “prioritizing nation’s warfighters” and a command-and-control approach to firms’ decision making.

Another unintended problem with the executive order is that it potentially decreases the pool of companies willing to engage with the U.S. government if they are required to give up control over how they manage their business decisions. The private sector was awfully quiet when the Trump Administration took 10 percent of the ownership of Intel. Now the executive order is targeting defense firms. This will be interesting to watch, as the U.S. government is courting the big oil companies to do business in Venezuela. Past experience and uncertainty regarding the future of Venezuela is already making companies nervous. This new executive order might add another item to their list of worries, when it comes to doing business with the government.

There is also the impact on current and future retirees amongst all this. Stock buybacks generally happen when companies have significant amounts of cash in their balance sheets and lack potential investment opportunities that could increase the value of the firm over the long term. Buybacks, like paying dividends, are an important way for corporations to return value to their shareholders. A lot of retirees own these shares inside and outside of their retirement accounts. It appears that the Administration lines up with some Democrats in the senate when it comes to their views on stock buybacks and dividends.

Internal Revenue Service data show that almost 33 million tax filers received ordinary dividends and 31 million tax filers received qualified dividends (subject to lower taxation) in 2022. In both cases, almost half of these filers had adjusted gross incomes less than $100,000. The importance of dividends as a safe stream of income for retirees is widely known. Holding a part of your retirement savings in dividend-paying stocks not only allows you to increase your savings, but also protects against inflation, which is becoming a bigger threat.

Signaling that the current Administration frowns upon distribution of dividends might lead other firms to reexamine their decision to pay dividends. For example, if the Administration shifts its attention to utilities, with the pressure of increasing electricity prices, they could become a quick target of the Administration due to their high dividend payments, ultimately hurting small savers and retirees who depend on this income.

U.S. firms have been delivering significant value, not only in terms of productive capacity for the U.S., but also for small and big financial investors alike. As a leader of free markets over the years, the U.S. government fostered an economic environment that led the firms to make the right financial decisions with healthy competition, ultimately leading subpar companies to disappear. We are at a crossroads, and it is important to decide whether this new way of American capitalism is the right road to follow.

Dr. Pinar Çebi Wilber is Chief Economist and Executive Vice President of the American Council for Capital Formation.