December 27, 2015

OUR TWO REPUBLICAN PARTIES:

America Is Not Becoming More Liberal : The public might be moving left, but the Democratic and Republican parties are not. (DAVID DAYEN, December 23, 2015, New Republic)

[W]hile Clinton has endorsed an agenda that puts her mildly to the left of where she was in her 2008 presidential run, that has lapsed somewhat as she's pivoted to the general election. And in one key area, she's held to a policy vow that leaves her helpless to pursue anything close to a liberal agenda.

This came up in last weekend's debate. Clinton maintained an important dividing line between her and Sanders, promising "no middle class tax raises," a promise she also made in 2008. The problem is that, in her version, the middle class includes families making up to $250,000 a year, which encompasses around 97 percent of the population.

The $250,000 dividing line actually goes back to the first Clinton Administration's demarcation of the top marginal tax rate (inflation has subsequently raised that to $464,000). And Barack Obama used the same vow to prevent tax increases on the so-called middle class. This has caused problems. Obama could barely fund his health care entitlement expansion by solely taxing corporations and the wealthy (the "Cadillac tax," which dipped down to union worker plans, was delayed last week). By setting the tax bar at $250,000, Obama had to compromise to $400,000 for repealing the Bush tax cuts. 

Because Democrats care more about deficits than Republicans--witness all the boasting about low deficits in the Obama era--opposition to broad-based taxes handcuffs the liberal project. Public investment in roads, schools, and other forms of infrastructure dropped in 2013 to its lowest level since World War II and hasn't moved appreciably since. The country has advanced in several areas in the Obama years, but on the fundamental issue of the size of government, conservatives have succeeded.

With an aging population, and with the cost of what government buys--health care, education, and defense, mostly--going up at levels above inflation, government spending must rise just to maintain the current inadequate level of services. To do that you must either run larger deficits or raise taxes, and just keeping those taxes confined to "the rich" won't bring in enough revenue.

For Clinton to double down on the $250,000 marker while making no promise to increase the deficit creates a one-way ratchet for public investment. She can announce all kinds of promising ideas--paid family leave, debt-free college, early childhood education--but if she refuses to either pay for them or decide that paying for them isn't necessary given their boosts to overall investment, they aren't likely to occur. 

Clinton has rejected a paid family leave bill from her home-state senator, Kirsten Gillibrand, because it would increase individual payroll taxes by 0.2 percent, about a $1.38 increase for the median wage earner. If she opposes that, Sanders said in the debate, "She is disagreeing with FDR on Social Security, LBJ on Medicare." It's a disavowal of universal benefits that happen to be the most robust, secure, and popular.

Posted by at December 27, 2015 12:58 PM

  

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