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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.

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I am not that thrilled at the DLC's American Dream initiative, although there are some parts that are good. The Bush tax cuts must be reversed to close the deficit. There's no provision for government programs to put people to work. Even Mark Warner said that he supports re-establishing programs like the WPA and the CCC to meet today's needs. We need to do something about homelessness all over the country, as well as helping the mentally ill and getting them off of our streets. These programs, which are vitally necessary, cost money and making the super rich pay their fair share of taxes will help us all. There's nothing in the DLC's platform about cutting the excessive spending on the military, and then there's the Iraq War. This is not to say that the Democrats shouldn't be for keeping us strong, but we must oppose excessive spending for useless weapons. On health care, of course I believe that people need to be educated to take better care of themselves. However, the proposals by the DLC are band-aid solutions. Their plan still relies on profit making insurance corporations. It's long overdue for this country to have a universal health care system, like they have in Canada and in European countries. The U.S. is the only industrialized country that lacks this. The Democrats must stand for either extending Medicare to cover everyone or for a Single Payer plan. This plan must also include prescriptions, dental and vision care, and must encourage treatment by alternative professionals such as chiropractos, acupuncturists, herbal specialists etc. Such a health plan will be much less expensive than the system, or lack of system I should say, that we currently have, where over 40% of the people are not even covered. We also need to massively improve public transit and to build a High-Speed rail system across the country, to save energy and to relieve automobile congestion.

We have very serious problems in this country that need to be addressed. I could mention more, but my piece would be too long. The Democrats must state that they're going to deal with these problems, or they won't get elected. I believe that the people of this nation are willing to hear the truth.

Walter

I'll have to read it, but I don't feel like I'm getting a good solid summary from the introduction. I like stuff I can memorize, so if for that reason alone I like the version of this I've been working (which admittedly is very very rough) more...

http://usprogressives.org/econ/

» secure basic freedoms
» invest in the future
» democratize wealth
» build the green economy
» housebreak capitalism
» globalize this approach

But we do need more than just the laundry list - we need an alternative narrative, and we need a name for that narrative. This still doesn't seem to be answering the Republicans are to supply-side economics as Democrats are to ??? economics question.

I'll go actually read it now, hopefully I'll be proven wrong and it's just a poorly written introduction...

It depresses me to read the American Dream Initiative.

The lofty goals of the ADI are not matched by the incrementalist laundry list of proposals. One of the reasons is the unwillingness to question fundamental precepts which are causing problems. You can see this in healthcare and retirement: why create employer *mandates* to provide health insurance and retirement? Why is it the job of businesses to be required to provide these, especially as with healthcare, everyone needs them anyway? It inflates business costs without providing a better distribution mechanism.

Their enthusasim for programs, or maybe just bad editing, makes the retirement section incomprehensible: first they say employers must enroll employees in either a defined-benefit plan or a 401(k) ... then talk about them enrolling them in an IRA or the equivalent of a Thrift Savings plan. Which is it?

How can they skim over the minimum wage? One of the easiest and most moral ways of both increasing the share at the bottom and of decreasing the social support systems needed from government? We need to get businesses out of the immoral business of poverty wages.

How can they ignore the impacts of globalization’s “race to the bottom” of wages and environmental destruction that affects global warming and air quality here?

How can they not address the corrosive effective of lobbyist and big money campaign contributions which is siphoning off billions of tax dollars in subsidies?

In other words, it is at least as much sins of ommission as of commission. But it reads quite Clinton-like: chock full of programs, some very expensive, few very efficient, some wishful thinking (fully integrated electronic medical records will take another 10-20 years, producing real but visible savings along the way as they’ll slowly get absorbed in the new way of doing things).

For my money, a much better, more comprehensive, more values-based agenda has been put together by the Campaign for America's Future: http://straighttalk.ourfuture.org/

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I have just finished reading the ADI from the DLC's website. I will begin with what I feel are the biggest fallacies of the ADI and some very important ommissions.

1) Healthcare

Healthcare is a huge cost in this country for business, government and individuals. The proposals in this paper do nothing to fix the real problem with the system: The health "insurance" indusrty. For one thing, health "insurance" is not true insurance; true insurance is there to provide payment in the event of loss due to unforeseen risks, not to provide payments to providers of services that occur regularly. Auto insurers due not cover oil changes, so why should health insurers have to pay for physical examinations?
The main proble with the US health system are the insurance companies; any plan or proposal which purports to place more money in their hands will be money wasted. It will line the pockets of HMO execs, and it will not reach the main players in the system, the patients and the providers.
Thus, the best way to fix the health care system is to first, require every provider of health services in the US to disclose the costs/prices of their services. The health industry is the only industry in the US that I can think of that does not do this. The fact that we have let them get away with this is ridiculous.
Second, we need to increase the number of RN's and Nurse Practioners in the US. Many of the everyday ailments that aflict most Americans can be solved by these providers. Heck, anyone who has gone to a doctor knows that it is generally the Nurse or the PA that actually talks to the patient. All the doctor does is come in an sign prescriptions. The market is already moving in this direction; in Minnesota there are clinics in Targets that are fee for service where PA's, RN's and NP's provide low grade, low cost medical services that really don't need MD's. We should encourage such businesses by passing legislation which will remove any anti-competitive barriers to such businesses. States which will not do so will be denied any state funds for healthcare (the same thing the Fed. Gov. did when it mandated raising of the drinking age to 21; states that did not do so were disallowed federal hwy money. The Supreme court said that was perfectly constituted as a rationally related goal of the government.)

Finally, the Federal government should set every person in the US up with a Medical Savings Account, and place in each account $2500.00. The money will gain interest just like an IRA, and would be Tax Free accumulations, like a Roth IRA, as long as the money goes to health care expenses. If you notice, this will accomplish the same thing the Massachussetts legislator wanted, requiring coverage by everyone, yet it will not have the effect of placing onerous burdens on the young and low income earners, as well as the self-employed and small business people who cannot afford traditional plans.

2)College Tuition

College education has increasingly become necessary in the US for two reasons; first, because employers do not trust the performance levels of the US primary and secondary education system graduates, and second, because some jobs have become increasingly technical, and thus US high schools, with there other onerous mandates, don't have the time or money to spend on such things.
Thus, in my opinion, simply giving more money to highschool grads and their parents to pay for college will not fix the main problems, and in fact could make it worse. We need a new primary and secondary educational model in the US. Are system is way to premised on indoctrination and behavioral submission than on actual learning. Why do schools spend so much time on discipline? Why are kids being given increasing amounts of drugs to cure "diseases" like ADD (boredom), ADHD (really bad boredom) and Autism (he is a little slow, so lets call him retarded, oh wait, I am sorry, I mean, "learning disabled). Oh, and did I mention that Boys in general and Black Men in particular always seem to be disproportionately diagnosed with these "diseases"? This is garbage. If you want to fix the education system in the US, first thing to do is have national teacher standards, a national funding source, and what I am about to say may cause many readers to drop dead WE MUST BAN TEACHERS UNIONS! These people are the biggest obstacles to reform. Until we get rid of them, everything else we do is just a band aid. They have stood in the way of pay for performance; they stood against national standards (which I know the DLC has supported in the past) and they only want increased education spending if the vast majority goes into their pockets. While I do support increased pay for teachers, I believe that the pay should be based on the college system of pay; in Universities, Econ profs make more than an English prof, and Engineering Profs make more than both. I believe science and math teachers should be paid a heck of a lot more than they are currently paid. Bad teachers should be fired; and really, they should not be hired in the first place. And, we should get rid of the stupid certification process which is nothing more than a boondogle for colleges to get unnecessary money.
Once you fix this, then you can get to the college system. It is way to expensive. The system is backwards. Why do 18 year old men and women have to have there money go to a school? Are they not adults? If they can serve in the military and vote, and if they are taking the step of going to college, we should trust them to make good financial decisions. Thus, financial aid should go to the students. Additionally, it should go to the students in the form of a forgivable loan, with two requirements; One, two years of military service (if unable to serve of physical reasons or religious ones, then 2 years of service in the peace corp or americorp will do) and second, graduation within 5.5 years after enrollment. A person will be able to extend that only for good cause (like illness, or pregnancy, etc). If these two things are done, then the loans would be forgiven upto 20,000.00. Why only 20,000 dollars? Because if you don't put a cap on the amount, the colleges will just set their tuition amounts above that. That is what they do now, especially in the professional schools.

Finally, my most radical proposal is to remove the exemption from discharge in bankruptcy of student loans. This will keep all of these private loan companies and schools from throwing all of this money around knowing that they will be paid back. It has essentially recieved loan income with 0 risk of non-payment. That is not a loan.

Now, for the ommissions:

What about free trade? The free trade consensus in this country among the overeducated elite centered in the Coasts has sold out the middle of this country. This country has become dangerously deindustrialized. That is what has led to the drop in incomes among the middle class. People don't understand how important industrial and manufacturing businesses are to this country. They buy services from other companies; they provide a large percentage of property tax revenue, thus lessening the burdens on homeowners and providing funding for school. (Do you think that school funding crisis that are happening around the country have occured around the same time as industrial companies have moved or shut down is a coincidence?). And, these companies helped us win WWI and WWII. They hire(d) the majority of the engineers in this country, or at least they used to; now, utility companies and financial firms do, because of the high level of mathematical expertise of some engineers. I am not saying that we should discourage this, but you obviously must see that if a very good engineer is designing financial instruments instead of better cars, you now know why the US went from the center if industrial innovation to the financial one. We need to provide specific tax breaks to our industrial companies, and we need to provide PROTECTION for them against cheap subsidized foreign competitors. That is what Japan, Germany, France, and China do, and we should as well. (Only the UK, the birthplace of the Free Trade ideology, doesn't. If anyone has been to the UK knows, the british produce nothing. everything is imported. Ireland has a higher standard of living than the UK. While it is true that teh UK has a lower unemployment rate than the rest of continental Europe, there employment comes mostly in service and retail, like banking, real estate and merchandising, and not in manufacturing. A former ex-pat brit told me that the only middle class people in Britain are government employees).

Finally, immigration. This issue is not going away just because the GOP senate and the Dems want it to. We need to drastically reduce illegal immigration into this country. I support the building of a fence, and I support the deportation of current illegals in this country. I don't care how hard or harsh it may seem, it must be done. We don't seem to care about the harshness of throwing 16 year olds into jail for selling marijuana, so we should not care about deporting an illegal immigrant. He/she has broken the law, and the laws should be enforced. Illegal immigrants reduce wages for low-skilled domestic workers. They do not form the majority of any industry's labor force (so the whole "they do jobs we won't due argument is garbage". Americans won't due the jobs that these illegals will do at the same wage). They also put strains on our social services, commit a large number of crimes, and basically, can ruin neighborhoods by lingering around and doing nothing.

The American Dream IRA is a great idea.

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