The phrase you undoubtedly will hear very often during the 2008 presidential is “middle class.” Both parties will compete fiercely for middle class suburban swing voters. The party that wins their hearts and minds will win the election.
Many Democratic candidates will bemoan the plight of the middle class, talking about how it is being squeezed by stagnant real wages, spiraling health care costs and the ever-increasing cost of a college education for the children of middle class workers. Republicans will claim everything is just wonderful for the middle class and that times will get even better if the Federal Government would just lower taxes more and get out of the way.
Now along comes a new study by a center-left Democratic group, Third Way, which says the middle class may not be in the dire shape that some Democrats portray but does feel economic pressure and insecurity that Republicans refuse to acknowledge. In short, these Americans remain optimistic and goal-oriented, but expect the Government to address their legitimate frustrations as they pursue the American dream.
I won’t go into Third Way’s statistical analysis of why the middle class is not going to hell in a hand basket (their entire study, “The New Rules Economy: A Policy Framework for the 21st Century,” is available at www.third-way.com). Rather, I would like to take a look at specific recommendations they have made to address middle class frustrations. These ideas, in whole or in part, may well find their way into the rhetoric and policy alternatives offered by candidates running for the Democratic presidential nomination for next year.
Addressing the fact that Americans today often change jobs during their working lives rather than staying with the same employer for their entire career, Third Way offers a series of recommendations to help the middle-class work force. These include full health care portability for workers who change jobs, better access to low-cost interim or transitional health insurance instead of the more expensive COBRA benefits in between jobs, elimination of any pension vesting requirements for defined contribution plans (currently three years) and creation of mandatory, automatic and portable 401k accounts that are owned by the worker and to which employers contribute.
Recognizing that 63 percent of mothers with children under the age of six work outside the home (compared to 39 percent 30 years ago) and that the full cost of day care ranges between $4,020 to $14,225 per year, Third Way calls for doubling the tax break for child care expenses, providing a “new baby tax credit” for the parents of newborns during the first three years of a child’s life and that a national, voluntary accreditation standard for child care quality be established.
Further, recognizing the challenge that many middle class families face in providing for elderly parents, Third Way proposed tax breaks for eldercare expenses incurred by adult children. It also proposed making long-term care insurance more accessible and more affordable.
Third Way also discussed ways to lower the cost of health insurance in an employer-based system. Employers have often held back wage increases in order to fund richer fringe benefits such as health care.
The report noted, “Companies should retain the flexibility to offer their workers a health insurance benefit, but public policy must also find a way to shift a significant portion of the burden of health care costs away from business and onto government.” Examples cited include making coverage of catastrophic or preventive health care costs a government responsibility.
These and other recommendations which focus on the needs of working-age middle class voters (which Third Way defines as ages 25 to 59) are compelling. However, Third Way finesses the issue of entitlement reform, stressing continued economic growth as the means of financing the middle class measures it advocates. It does this without clearly spelling out how projected deficits in Social Security and Medicare are to be resolved.
Nothing is simple in politics these days and party attitudes can be difficult to change.
Republicans stubbornly dismiss middle-class frustrations with the mantra, “You’ve never had it so good, so quit complaining. We will give you more and more tax cuts to help you now and particularly when you become wealthy and at the same time (‘wink, wink’) cut the deficit.” Don’t expect them to pick up on many of Third Way’s ideas.
Hopefully, Democrats will take the study as constructive criticism and cut back on the gloom and doom when approaching middle class voters. After all, we are still basically an optimistic people who believe in the American dream of hard work and economic success and that the lives of our children can be better than our own.
Democrats have the opportunity to face up to entitlement reform at the same time they respond to the current very real needs of the middle class. American voters are fundamentally pretty smart and they aren’t always looking for instant gratification. Let’s keep our economy strong and solve our long-term problems at the same time.
Martin Frost served in Congress from 1979 to 2005, representing a diverse district in the Dallas-Ft. Worth area. He served two terms as chairman of the House Democratic Caucus, the third-ranking leadership position for House Democrats, and two terms as chairman of the Democratic Congressional Campaign Committee. Frost serves as a regular contributor to FOX News Channel and is a partner at the law firm of Polsinelli, Shalton, Flanigan and Suelthaus. He holds a Bachelor of Journalism degree from the University of Missouri and a law degree from the Georgetown Law Center.