American Dream Initiative
by Scott Winship
When it was announced a year ago that Hillary Clinton had accepted the Democratic Leadership Council’s request to lead their agenda-setting efforts for the 2006 and 2008 elections, many critics were, shall we say, angry. David Sirota’s feelings toward the DLC – and toward Senator Clinton by association – summed up the prevailing attitude:
The fact is, the Democratic Party has to make a choice: Is it going to continue to follow the DLC, be a wholly owned subsidiary of corporate America, and lose elections for the infinite future? Or is it going to go back to its roots of really representing the middle class and standing up for ordinary people's economic rights?
Well, today the DLC unveiled its agenda, The American Dream Initiative [pdf]. It remains to be seen how DLC critics will react, but to my mind, there is far more here that they should embrace than reject. To begin with, the initiative was undertaken cooperatively not only with the moderate Third Way, but with the Center for American Progress and the Howard Dean- and labor-friendly NDN. What did this coalition recommend in the end?
The report of the initiative begins with a priority that will set off red flags with some DLC critics: fiscal responsibility. The report calls for caps on discretionary spending but it does not propose the repeal of any of the Bush tax cuts. Instead, it would raise over half a trillion dollars over 10 years by eliminating corporate tax subsidies, downsizing the federal consultantocracy, capturing capital gains taxes that are currently evaded, and other measures.
Given the difficulty of closing corporate tax loopholes and the fact that spending caps are likely to be relatively high in order to accommodate the new programs below, it is difficult to see how we can reduce the deficit without at least a partial roll-back of the Bush tax cuts. But strategically, the initiative is clever in that it proposes other ways to fund new spending, so that if deficit reduction remains necessary after these savings measures, a rollback of the Bush tax cuts could be justified on the grounds that the additional revenues will be for fiscal responsibility rather than additional spending. The new programs are “paid for”.
The American Dream Initiative’s revenue-generating measures would allow for substantial additional social spending. The plan calls for boosting the number of college graduates by one million by 2015. It would do so through a $150 billion block grant to states to make public colleges and universities more affordable and raise graduation rates, a $3,000 refundable tuition tax credit (which would replace and expand a number of existing tax credits), secondary education reform, and additional money for non-traditional college students.
In health care policy, the American Dream Initiative would allow small businesses to join together and create a bigger insurance pool (thereby making coverage for their employees more affordable), and it would seek to achieve universal coverage of children. The initiative would invest in health care information technology to reduce costs and the frequency of medical errors. Finally, it proposes an attack on obesity, anti-smoking campaigns directed at children, creation of a National Center for Cures to make health care research more efficient, more liberal stem cell research policy, and allowing Medicare to negotiate prescription drug prices with private insurers.
What else? How about a Baby Bonds program that would give interest-bearing $500 bonds to all children at birth and again at age 10? How about making the mortgage interest tax deduction available to taxpayers who don’t itemize? A $5,000 refundable tax credit for down payment costs? Tax incentives for the construction of affordable homes? Expanding FHA loans and creating tax incentives for employer-provided housing assistance? Done and done.
Want more? The initiative proposes employer-mandated retirement accounts for all but the smallest employers, with tax credits to help businesses pay for them. It would also make employees opt out of contributing to these accounts rather than depending on them opting in. And it would make the existing Saver’s Credit refundable, giving lower- and middle-income families a fifty percent match for savings of up to $2,000 a year.
Finally, the American Dream Initiative would expand the economy through fiscal responsibility, increasing international trade, and investing in technology and alternative energy. It would require companies to offer the capital-building benefits they give their executives to all their employees and would make them report to the SEC data on profitability, foreign vs. domestic employment, and CEO and average-worker compensation. And it would impose additional regulations on pension and mutual funds to protect investors.
Presumably, few of us support all of these ideas, but taken together, this agenda strikes me as “progressive” by just about anyone’s definition. Of course, by itself it won’t necessarily be enough to win in 2008. After all, it plays to the Party’s strengths in economic and social policy. The 2008 nominee will also need an equally promising strategy on national security and on values.
To my mind, the best way to frame the entire agenda – from domestic policy to foreign policy to values – is to emphasize a duality that is central to the American Dream Initiative: the linking of opportunity to responsibility. We need to join the American Dream to the social contract, requiring responsibility from parents (for enrolling their children in available health insurance and other programs), non-custodial dads (for paying child support), recipients of means-tested benefits (for becoming self-sufficient), and college students receiving federal aid (for giving back to their communities). Employers must be responsible in their relations with consumers and employees and accountable to them. And the commander-in-chief must be accountable when he or she deceives the citizenry, bungles wars or recovery efforts, and explodes the budget deficit.
Wooing values voters doesn’t require us to become anti-abortion or anti-gay. By embracing the social contract – the idea that in return for providing public aid, society rightly can make requirements of beneficiaries – Democrats can tap into responsibility, a value that is as deeply felt as opportunity in America. And appealing to responsibility can link the American Dream Initiative to our foreign policy critique of Republicans while partly inoculating us against a values-based attack.