Obama's Second Term Could Mark the Return of the Four Freedoms

Nov 21, 2012David B. Woolner

As part of our series "A Rooseveltian Second Term Agenda," a call to return to a foreign policy based in FDR's vision of shared peace and prosperity.

As part of our series "A Rooseveltian Second Term Agenda," a call to return to a foreign policy based in FDR's vision of shared peace and prosperity.

Even though we come from different places, we share common dreams: to choose our leaders; to live together in peace; to get an education and make a good living; to love our families and our communities. That’s why freedom is not an abstract idea; freedom is the very thing that makes human progress possible — not just at the ballot box, but in our daily lives.

One of our greatest Presidents in the United States, Franklin Delano Roosevelt, understood this truth. He defined America’s cause as more than the right to cast a ballot. He understood democracy was not just voting. He called upon the world to embrace four fundamental freedoms: freedom of speech, freedom of worship, freedom from want, and freedom from fear. These four freedoms reinforce one another, and you cannot fully realize one without realizing them all.—Barack H. Obama, University of Yangon, November 19, 2012

In his historic visit to Burma, also referred to as Myanmar, President Obama spoke at length about the journey Burma is taking from dictatorship to democracy, a transition he said has the potential to inspire people the world over as “a test of whether a country can transition to a better place.”

President Obama made it clear that his journey to Burma—the first by an American president—was inspired in part by his own desire to encourage the people and government of Burma to press ahead with their democratic reforms so that the “flickers of progress” that the world has seen will not be extinguished. The president’s visit was also notable for his repeated insistence that America was a “Pacific nation,” whose “future was bound to those nations and peoples to our West.” But perhaps the most significant aspect of his speech was his decision to frame his remarks around a concept first articulated by Franklin D. Roosevelt at one of the darkest moments of the Second World War—the need to build a world founded on four fundamental human freedoms.

At a moment when Adolf Hitler had proclaimed the onset of “a new order” in Nazi-occupied Europe, and when Japanese militarists had seized much of China and were poised to expand their grip on Southeast Asia, Franklin Roosevelt proposed “a greater conception,” a “moral order” that represented the very antithesis of the “tyranny which the dictators seek to create with the crash of a bomb.” FDR’s order was based on the idea that all people—“everywhere in the world”—deserved the right to enjoy freedom of speech and expression; freedom of worship; freedom from want; and freedom from fear.

He articulated this vision in part because of the critical need to gain the support of the American people and Congress for the passage of the Lend-Lease Bill that was pending on Capitol Hill. But the enunciation of the Four Freedoms and initiation of Lend-Lease—which would make it possible for the United States to provide arms and munitions to Great Britain free of charge—was also inspired by a much deeper conviction: that the security of the United States was tied directly to the health and well-being of other nations.

For many Americans today, World War II and the Great Depression are two separate events. But for the generation that lived through these unparalleled crises, nothing could be farther from the truth. In their minds, and in the mind of Franklin Roosevelt, the two were inextricably linked. The Great Depression, after all, was not confined to the United States, but represented a worldwide economic crisis that helped inspire anti-democratic forces in both Europe and Asia—anti-democratic forces that helped give rise to the fascist movements in Germany and in Japan that would initiate the most destructive war in human history.

In light of this, Franklin Roosevelt remained convinced that the Second World War had economic causes. Moreover, as the war progressed, he became more and more convinced that America’s security was tied to the security of the rest of the world. As such, it was not enough for the United States to rely solely on the strength of its armed forces to provide for the nation’s safety; we also had to concern ourselves with the political, social, and economic health of other regions of the world since, as FDR put it in 1944, “true individual freedom cannot exist without economic security and independence”…and “people who are hungry and out of a job are the stuff of which dictatorships are made.”

It was this basic idea that inspired not only the Four Freedoms, but also the many institutions and practices that were put in place during and after the war to foster international cooperation and a more prosperous, healthy, and peaceful world. Many of these institutions and practices—like the United Nations, International Monetary Fund, World Bank. and multilateral trading regime—are with us still, so that much of the world we live in today is the world shaped by the vision of Franklin Roosevelt.

In recent years, however, we seem to have moved further and further away from this vision to a foreign policy that is dominated largely by the use of military force—no doubt inspired in part by the advent of modern technology, such as drone aircraft. This is unfortunate, for even though President Obama has shown willingness to use other means to pursue America’s interests abroad, his foreign policy to date has remained highly militarized.

His eloquent speech in Burma may indicate that he has decided to pursue a more progressive foreign policy agenda in his second term, one based on the recognition that the best means to keep America safe in the long term is to ensure that the hopes and aspirations of people the world over to enjoy freedom of speech and expression, freedom of worship, freedom from want, and freedom from fear stand not, as Roosevelt said, as some “vision of a distant millennium,” but as “a definite basis for a kind of world attainable in our own time and generation.”

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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A Solution for Money in Politics Highlighted by the Election

Nov 20, 2012Mark Schmitt

As part of our series "A Rooseveltian Second Term Agenda," an acknowledgment that the election didn't just showcase the problems of outside money in campaigns, but a potential way forward.

As part of our series "A Rooseveltian Second Term Agenda," an acknowledgment that the election didn't just showcase the problems of outside money in campaigns, but a potential way forward.

It's been tempting to treat the 2012 election as proof that money in politics doesn't matter as much as commonly believed, or that Citizens United and the emergence of Super PACs and political non-profits didn't change things as much as predicted. “Effect of 'super PACs' proved to be less than expected,” the Los Angeles Times declared in a post-election headline.

It is true that the presidential candidacy most dependent on Super PACs and other “dark money” support was soundly defeated, and the same was true of the Senate candidates backed by Karl Rove's American Crossroads and related groups. Prophecies that corporate money would flood in and swamp the candidates, particularly Democrats, didn't come true. (Some of us were always skeptical of this prediction.) And it turned out the Super PACs had some particular disadvantages because they couldn't purchase media time at the favorable rates that are available to campaigns. The Republican dark money committees' focus on broadcast advertising to the exclusion of other campaign activities turned out to be misplaced in an election where the “ground game” of identifying voters and getting them to the polls is what mattered. (It's also likely that the Republican Super PAC operators focused on radio and television because there are financial incentives for consultants to buy media and collect a commission of 10 or 15 percent. Voter mobilization efforts don't have the same payoff.)

But a general election presidential campaign, and even a high-profile Senate campaign, is not where we would expect to see the decisive power of money in election outcomes. Presidential candidates, especially incumbents, are well known and have ample opportunity to get their message out without paying for it. For example, half the number of people who voted watched at least one of the presidential debates. Money is more significant in determining who has an opportunity to run for office and whether that candidate has sufficient resources to be heard.

This year's elections for the House showed just how much money still matters. More than nine out of ten incumbents were reelected, despite a backlash against the Republican House reflected in the aggregate vote (48 percent to 47 percent). While some of this incumbent advantage was a result of redistricting that entrenched Republican seats, a great deal of incumbent advantage involves money that incumbents can raise from lobbyists and few challengers can. According to the Campaign Finance Institute, incumbents who won with more than 60 percent of the vote, which accounts for more than two-thirds of races, outspent their challengers by a factor of nine. Notably, most of the seats captured by Democrats in this cycle involved very high-profile Tea Party Republicans like Allen West of Florida or Joe Walsh of Illinois and opponents who were either well known in progressive circles, such as Walsh's successful opponent Tammy Duckworth, or former members of Congress with established fundraising bases. In many of those high-profile races, such as West's, outside groups played a large role. Data from the Campaign Finance Institute indicates that successful challengers spent $2 million, suggesting that that is the new price of entry for a viable campaign, although this will vary greatly by region.

But even these results show some hope. Many of the successful Democratic candidates, like President Obama, were able to build strong bases of small donors. While Obama's small donors accounted for 44 percent of his total, Duckworth, for example, raised 37 percent from small donors. The small donor era, which began in 2008, has continued in both parties. This suggests that the best path to making elections competitive and offsetting the influence of big money, outside money, and dark money is to enhance the value of small contributions. This can be done through a matching program such as New York City's successful model, the proposed Fair Elections Now Act (supported by a majority of Democrats in 2010), or Rep. John Sarbanes' Grassroots Democracy Act.

Since Citizens United, many reformers have worried that such initiatives would be rendered ineffective by the flood of big money, which would overwhelm the small donors, or that candidates would resist participating in these matching programs, fearing big outside money attacks. That would argue for pursuing a remedy for Citizens United, in the Constitution or the Court, before moving on to matching fund public financing. But the election results, in which neither Obama nor successful candidates for House and Senate were overwhelmed by outside money, indicates that these systems are likely to be more resilient than we think. Giving every candidate the opportunity and encouragement to build a participatory base of small donors isn't the only thing we need to do to offset the influence of money in politics, but it is a good start. House minority leader Nancy Pelosi identified campaign finance reform as a major priority for her caucus in the next Congress. The first step is to reach consensus on what is to be done, and the election points in a clear and positive direction toward solutions that encourage participation and grassroots campaigns.

Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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The Missing Living Wage Agenda

Nov 20, 2012Annette BernhardtDorian Warren

As part of our series "A Rooseveltian Second Term Agenda," a long-term plan to provide justice on the job for all workers.

As part of our series "A Rooseveltian Second Term Agenda," a long-term plan to provide justice on the job for all workers.

Now that the election is over, our hope is that we can finally move beyond the vacuous invocations of an imaginary middle class where everyone is in the same boat. It’s time to get real about the concrete policies needed to take on the multiple inequalities that run deep through the U.S. labor market. And we’re not talking about the “skills mismatch,” another red herring routinely flung into this debate by both sides (including by President Obama as recently as the last week of the campaign).

What we’re talking about is a broad, multi-year agenda to give America’s workers a living wage and voice on the job and to take on the continuing exclusion of workers of color, immigrants, and women from good jobs. The media may have discovered inequality last year with the surprise emergence of Occupy Wall Street, but in truth, there is a 30-year backlog of policies to fix the extreme maldistribution of wages and opportunity in the labor market.

First, we have to make our core workplace standards much stronger – whether it’s in terms of wages, health and safety, or voice on the job. That means raising the minimum wage so that it’s a meaningful floor again (some good news: voters in Albuquerque, San Jose, and Long Beach raised theirs last week). It means updating health and safety regulations written in the 1970s. And it means restoring the right to organize, because at this point, virulent employer opposition and retaliation has rendered U.S. labor law obsolete. Fifty-eight percent of U.S. workers say they would like to be represented by a union, but only 11.8 percent actually are. This is what happens when one out of four workers is fired illegally for attempting to organize a union while employers face minimal penalties.

Second, we have to take on the profound reorganization of the American workplace. The poster child for precarious work is temp jobs – but subcontracting has had a much broader impact, as janitors, laundry workers, warehouse workers, security guards, food service workers, and millions of others have been outsourced to low-wage firms. A good model for a solution is California’s recent law making companies liable for minimum wage and overtime violations by their subcontractors, recognizing that end-user firms such as Walmart exert considerable control over working conditions down their supply chains.   

Third, we have to double down on enforcement. A 2008 study of Chicago, Los Angeles, and New York found that 26 percent of low-wage workers were paid less than the minimum wage and 76 percent were underpaid or not paid at all for their overtime hours. Yet the number of federal wage and hour inspectors is still below 1980 levels, and it would take 131 years for OSHA investigators to inspect each workplace just once. Until employers face substantial costs to their bottom line (as is true in other bodies of law, such as environmental regulation and employment discrimination law), practices like wage theft, retaliation against workers trying to organize a union, and independent contractor misclassification will continue unabated.

Fourth, we have to do a better job of leveraging the government’s capital. Public money touches millions of private-sector jobs, whether by purchasing goods and services for the government or by funding everything from schools and bridges to health care and social services. There are plenty of innovative models to ensure that this money results in good jobs, whether it’s responsible contracting policies (in California, Massachusetts, Connecticut, and Illinois), living wage laws (in more than 140 cities and counties), or accountable economic development policies (in Los Angeles, Pittsburgh, and New York City, among others).

Fifth, we have to explicitly break down systemic labor market exclusions of people of color, immigrants, women, the unemployed, and people with criminal records. For example, advocates are pushing the U.S. Department of Labor to finally end the exemption of home care workers from minimum wage and overtime protection, and cities across the country are passing “ban the box” policies to reduce hiring barriers for people with arrest or conviction records.  

But we also have to challenge de facto exclusions. A good example is targeted hiring and training programs on publicly funded projects, which in our mind will be crucial to solving the escalating (and chronically under-reported) economic crisis in communities of color. A great example is Portland’s 2009 residential retrofitting program, which mandated living wages and local hiring from designated training programs. As of last year, the program’s workers earned median wages of $18 per hour; fully 84 percent were local residents, nearly half of them people of color. While unemployment is still at Depression-era levels in many black communities, we know what works to employ those still excluded from access to the labor market.

A final word on why we think these policies (and many others; see the long-form version here) are politically viable. In communities across the country, there is an undeniable thirst for justice on the job and investment in local communities. This is true not just for raising the minimum wage, which consistently polls in the 70-80 percent range, but also policies such as paid sick days, increased funding for elder care and child care, cracking down on wage theft, using taxpayer money to create living wage jobs, and restoring the right to organize.

(If you doubt support for organizing, consider the recent wave of strikes by Walmart workers, or New York’s taxi workers organizing for better pay even though they are independent contractors, or Palermo’s pizza workers in Wisconsin staying out on strike for three months and now pressuring Costco to boycott their employer.)

The real question is whether President Obama and Democrats in Congress understand that raising taxes on the top 2 percent is only the first step on a long road toward building a sustainable living wage economy in the U.S. Our hope lies in the growing recognition among progressives that it will take the pressure and power of social movements to convince him to walk that road with us.

Annette Bernhardt and Dorian Warren are Fellows at the Roosevelt Institute.

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An Agenda for Revitalizing Our Democracy

Nov 19, 2012Richard Kirsch

As part of our series "A Rooseveltian Second Term Agenda," important steps that can get us back to a truly representative form of government.

As part of our series "A Rooseveltian Second Term Agenda," important steps that can get us back to a truly representative form of government.

This election was ample reminder of the myriad ways we urgently need to fix our democracy. As Justice Brandeis wrote a century ago, "We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both." The greatest barrier to achieving the next Rooseveltian agenda proposed in these posts is the deep flaws in our democracy. To move forward on our aspirations, we need to integrate a democracy agenda into all of our battles for a fair economy and sustainable environment. Here is a short list of crucial reforms to revitalize our democracy:

1. Bolster voting rights. President Obama can make good on his impromptu remark that "we should fix that" when he addressed Election Day voting problems in his victory speech by pushing for passage of the Voter Empowerment Act, sponsored by New York Senator Kirstin Gillibrand and Georgia Representative John Lewis. The act's two major provisions would automate voter registration whenever people interact with the government and allow for same day voter registration nationally. Other provisions address barriers to voting such as using mail to purge voters, partisan voter administration, and felony disenfranchisement. Nationwide early voting should be added to this agenda.

2. Change the Electoral College. After another election in which the presidential candidates ignored the electorate in 40 states -- with fewer people in those states bothering to vote -- federal and state representatives from the outcast states should be eager for change. While it would be wonderful if that led two-thirds of Congress to amend the Constitution, an easier and more feasible path is offered by National Popular Vote. NPV is a compact between states representing more than half of the Electoral College to cast their votes for the winner of the national popular vote. The movement is halfway to its goal with legislation passed in 12 states that together hold 132 Electoral College votes, including California, Illinois, and New Jersey. Republican Governor Jan Brewer added her support after this year's election. Imagine an election in which presidential candidates had to focus on issues and voter turnout in every state! The result would impact not just the presidency, but down-ballot races across the country.

3. Increase public financing. While Super PACs may not have gotten all their money's worth, the public agenda remains captive to the upper-income contributors and corporations who finance the lion's share of elections. We won't get a bumper crop of candidates who represent the interests of ordinary people until we have a campaign finance system that allows candidates to compete successfully by rejecting large contributions in return for small contributions matched by public funds. Getting there is impossible in this Congress, but that shouldn't stop reformers from constantly raising the flag while looking for opportunities to move forward in states. New York has a real shot of passing a good public financing bill in 2013. And when President Obama has the opportunity to appoint new Supreme Court justices, reformers should make both Citizen's United and the 1976 Buckley v. Vallejo decision that equates money with speech major issues in the confirmation hearings.

4. Fix the filibuster. It's bad enough having a fundamentally undemocratic body like the U.S. Senate as a co-equal legislative body, but that institution's rules also thwart the constitutional provision that Senate decisions on legislation are to be made by majority vote. Democrats should not settle for making senators actually filibuster; they should put in place the proposal by Iowa Senator Tom Harkin, which would reduce the votes needed to stop a filibuster from 60 to 51 over the course of debate.

5. Institute non-partisan redistricting. Partisan redistricting increasingly makes the congressional body designed by the Constitution to provide equal representation fall far short of that goal. While Democrats narrowly won the popular vote for members of the House this year, partisan drawing of congressional lines will result in Republicans having at least 30 more representatives. The path to change here is arduous: state by state. But a Supreme Court committed to the Constitution's vision of the lower body as a people's house could take a fresh look at permissible gerrymandering.

Cast by themselves, democracy reforms too often cause the public's eyes to glaze over, not seeing the connection between process and the pressing issues in their daily lives. Champions of creating a vital democracy can turn that around by connecting people's topmost concerns -- good jobs, a secure retirement, affordable quality education, and, increasingly, climate disruption -- to creating a government that works for all of us, not just the wealthy and CEO campaign contributors. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Three Principles for Restoring Progressive Taxation

Nov 19, 2012Mark Schmitt

As part of our series "A Rooseveltian Second Term Agenda," advice on revamping the tax code to raise the revenue we need.

As part of our series "A Rooseveltian Second Term Agenda," advice on revamping the tax code to raise the revenue we need.

Our current tax system is a toxic legacy of the George W. Bush years. It loomed over Obama's first four years, bearing deficits that limited the scope of economic stimulus, drove inequality to astonishing levels, and led directly to the debt limit showdown of the summer of 2011 that forced us into even more dangerous policies. President Obama's second term offers a long overdue opportunity to restore the promise of progressive taxation and revenues that are adequate to our long-term economic priorities. It requires both short-term and long-term action.

The greatest failure of the tax system is not that it’s too complicated or inefficient or that there are too many “special-interest loopholes,” as House Speaker John Boehner put it on the day after the election. It's that it doesn't raise enough money and it encourages all sorts of manipulation because of the differential rates for investment income and income from work. These are not things that developed over time, as if by some natural process – they are the product of specific decisions made in 2001 and 2003 by Republican-controlled Congresses that used the budget reconciliation process to avoid any bipartisan compromise.

Here are some principles that the administration should hold to in restoring adequate and progressive taxation:

1. Start from the law, not current tax policy. Under the law, the Bush tax cuts expire on January 2, 2013 and revert to their levels at the prosperous end of the 1990s. This expiration along with several temporary tax cuts that expire at the same time and the budget sequester devised to escape the House GOP blackmail on the debt ceiling in 2011 is what's known as “the fiscal cliff.” There will be an effort to negotiate a deal on taxes and spending before we hit the cliff out of fear that expiration of all the cuts at once would tip the country back into recession. But the effect won't be felt at once, and there's plenty of time to negotiate a new round of cuts once the law as written goes into effect. There is no reason to negotiate based on rates that are set to expire within weeks or days.

Under the law, capital gains rates will rise to 20 percent from 15 percent, dividends will be taxed at the same rate as regular income, and two provisions that limit personal deductions and exemptions for the wealthy will come back into effect. All tax rates will rise, but the tax code will instantly be fairer, by every definition, than it was in December. From that baseline – which is not some accident; it's what the law calls for – we can have a debate about which rates should be permanently lowered. There's a strong argument, for example, for bringing the bottom rate back down to 10 percent, given that these are the households that were hit hardest during the recession and saw few gains even during the prosperous years before 2008.

2. Don't try to define “the rich” with arbitrary thresholds. In its first four years, the Obama administration's tax policy was hamstrung by its commitment to the $250,000 line – that no household with taxable income lower than a quarter of a million dollars should face any kind of tax increase and any increase should apply only to the income above $250,000. Later, the line became a million dollars as the administration tried to craft what it called “The Buffett Rule” to remedy Warren Buffett's recognition of the absurdity that he paid a lower tax rate than his secretary. These new thresholds would be grafted onto the tax code on top of the existing rate brackets. For example, households with incomes below the quarter-million line would keep the preferential rates for capital gains and dividends, while it would go up for those above it. These thresholds would add a new level of complexity to the tax code, sharply reduce the revenues that could be gained, and reinforce the impression that taxes are a sort of punishment for the rich. It's a lot simpler, more efficient, and infinitely fairer to say that a single person who makes, say, $80,000 from capital gains alone should pay the same rate, no more and no less, than a comparable household that earns $80,000 from work. Right now, the first household would pay less. With the same rates for all income, rates can be held down and we can maintain the low-end cuts, such as the 10 percent rate for middle-class households, and gain enough revenue for the future. Artificial new thresholds, which would apply to some forms of income and not others, will make this much more difficult.

3. Consider one new source of revenue – and make it a “Pigovian” one.  Even an ideal income tax system, one in which income from any source is taxed in the same way and distorting deductions are kept to a minimum, is unlikely to raise sufficient revenues to support the level of investment the country needs in the long run. Adding one additional source of revenue will not only help to close the revenue gap, but it can serve vital purposes as well. (Such taxes, which have a dual purpose of raising revenue and reducing some undesirable activity, such as smoking, are known as “Pigovian,” after the Cambridge economist Arthur Pigou.) The two leading candidates would be a tax on carbon and a very small tax on financial transactions. The former would have some of the same effect as a cap-and-trade system to reduce emissions that cause climate change, with less complexity, and could also fund clean energy research and job creation. The latter would generate revenue from the still thriving financial industry, while putting a little bit of friction into transactions and reducing the payoff – and the risk – created by strategies that rely on massive, fast trading. While those strategies weren't the main cause of the 2008 financial meltdown, they do play a role in creating instability (such as the “flash crash” of 2010). Either of these, or both, would helpfully supplement the income tax, the payroll tax (which supports Social Security and Medicare), the corporate income tax, and federal excise taxes. 

Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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The Fiscal Cliff Showdown Will Set the Agenda for the Next Four Years

Nov 16, 2012Richard Kirsch

As part of our series "A Rooseveltian Second Term Agenda," a look at the four biggest budget issues that will be debated in the next four months.

As part of our series "A Rooseveltian Second Term Agenda," a look at the four biggest budget issues that will be debated in the next four months.

The very next day after the election, congressional leaders held dueling press conferences in Washington to start the stampede to the fiscal cliff. But December 31st is not a cliff; it’s a slope. Actually, the better metaphor is a showdown between two different visions for the country – a showdown that will not only take place over the next four months, but will dominate debate about the economy for the next four years.

It is true that if Congress allows the tax hikes and spending cuts to be fully implemented, the economy will go into a tailspin, with four million people forced out of their jobs. But that won’t happen on January 1st. The impact of both tax hikes and spending cuts take time to accumulate. If Congress acts on taxes early in the year, it can make lower tax rates retroactive to the beginning of the year. Between federal contracts already in place and the time it takes to implement program cuts, budget cuts too will take a while before they slow down the economy. Better for Congress to walk down and back up the slope early in the year than be stampeded into bad decisions.

In this showdown we have a choice between two paths: prosperity for working families and the middle class or more for millionaires and CEOs. While the showdown will play out in the next few months, the issues will continue to set the economic agenda for the president’s second term. Both the immediate and continued battles will be over four issues: taxes, social insurance, federal discretionary spending, and investments to create jobs.

1. Taxes: The immediate battle will be whether or not to end the Bush tax rates on income over $250,000. The president has rightly made this his line in the sand. If Republican don’t budge, Democrats should wait until next year when all the Bush tax cuts expire, forcing House Republicans to continue to protect tax preferences for the wealthy while taxes go up on working and middle-class families.

The four-year agenda is to restore progressivity to the tax system. Progressives should define tax reform as taxing wealth at the same rate as income from work and enacting higher rates on the highest incomes. With corporate taxes the lowest they have ever been as a share of federal revenue, our agenda should be to end the loopholes and tax preferences for corporations that ship profits and jobs overseas and the breaks from exploiting our natural resources. We should raise more money from a loophole-free corporate tax system.

2. Social insurance: The big three social insurance programs – Social Security, Medicare, and Medicaid – are all protected from the automatic spending cuts, but that hasn’t stopped deficit hawks from trying to bring them into the upcoming debate. Changes to Social Security, like the Simpson-Bowles plan’s “adjustments” to the COLA that will result in 15 percent or more cuts in benefits to middle-class recipients, may well be put on the table as part of “grand bargain.” Democrats should follow Senate Majority Leader Harry Reid, who declared that Social Security is not on the agenda. Over the next four years, progressives should push for the obvious fix to the projected shortfall in the Social Security trust fund: raising or eliminating the cap on how much of earnings are subject to Social Security payroll taxes. That solution would extend the life of the trust fund to 2075 and beyond. It is politically popular, easy to explain, and fits within the broader progressive theme of a tax system that bolsters working families and the middle class by requiring a little more from those with more.

While Social Security does not add a dime to federal deficits, the same can’t be said of the rising pressures of health care spending on Medicare and Medicaid. Both programs should remain off the immediate fiscal showdown agenda, with Democrats pointing out that health care inflation over the past two years is at the lowest level in decades. Some of that is because of changes being put in place by the Affordable Care Act, which has a number of measures to control health care spending in Medicare by eliminating wasteful care and overpayments to health insurance companies. The big agenda for the next four years on health care is to continue to accelerate the changes put in place by the ACA, including that new panel – which the right likes to demonize – that will push Medicare to force providers to provide better care or see their revenues drop. Another top priority is for the federal government as well as states to follow what Massachusetts is doing: use the new health care marketplaces to review health insurance company rate increases and pressure health care providers to provide better quality care at lower cost.

3: Federal discretionary spending: The choice here is straightforward: the amount of revenue raised from ending the Bush tax cuts on income over $250,000 is almost the same as the total cuts to federal discretionary spending. Republicans are eager to stop the Pentagon’s half of the automatic cuts. While many Democrats want to protect the Pentagon, they also want to block the slashing of vital services for families and all the other things – from environmental protections to diplomatic functions – that the federal government does. Progressives should focus on those services that most support low-income and working families, like Pell grants, Head Start, WIC, and food stamps. These are very popular with the public and make the choice crystal clear.

In response to the Pentagon lobbying for more, progressives should argue that Pentagon spending can easily be trimmed, since even if the automatic cuts go through the Pentagon will still be spending more than at the height of the Cold War. Over the next four years, progressives will need to drive home the point that Pentagon spending creates far fewer jobs than spending on health care, education, and other domestic programs, so that reshaping the Pentagon for the 21st century makes both military and economic sense.

It is crucial that progressives link spending choices to jobs. For example, if unemployment insurance for the long-term unemployed is allowed to expire at the end of the year, the loss of benefits to 5 million people will result in another 448,000 being pushed onto the unemployment rolls in 2013. In fact, the biggest job losses among the many choices facing Congress would come from ending long-term unemployment insurance and cutting domestic spending.

4. Good jobs: One thing not on the immediate fiscal agenda is a program to create good jobs. It should be, as the sluggish economy and long-term decline in wages and benefits promises to keep millions of Americans out of work and a growing share of the workforce struggling to make ends meet. Progressive should use the fiscal showdown to go beyond highlighting the job impact of spending cuts. Instead, we should put forth a two-pronged jobs agenda and make this the central push for the next four years.

One prong is investment to create jobs: infrastructure, green jobs, “caring jobs” like day care, elder care, and putting more teachers in our classrooms. We should be pushing for a big youth jobs program. The second prong is job quality: restoring the rights of people to effectively organize unions, modernizing basic work standards by doing thing like raising the minimum wage and indexing it to inflation, and requiring all employers to provide a set number of paid sick days.

The Affordable Care Act will address the growing problem of jobs not coming with health care; here implementation is key. We should also be pushing for the establishment of a new retirement program, such as proposed by Senator Tom Harkin, under which workers would put aside a share of earnings in a pooled, professionally managed plan, with guaranteed, lifetime benefits at retirement or upon permanent disability.

The push for the comprehensive progressive economic agenda above – fair taxes, stronger social insurance programs, protecting vital public services for working families, and investment in good jobs – should start with the upcoming fiscal showdown. The battle between a vision of prosperity for working families and the middle class versus more for millionaires and CEOs is one we should wage for the next four years.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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How to Strengthen Financial Reform in the Next Four Years

Nov 16, 2012Mike Konczal

As part of our series "A Rooseveltian Second Term Agenda," an outline of what needs to be done to build upon and safeguard Dodd-Frank.

As part of our series "A Rooseveltian Second Term Agenda," an outline of what needs to be done to build upon and safeguard Dodd-Frank.

One of the Obama administration’s biggest vulnerabilities when it comes to its first term policy legacy was that the roots of the legislation it ushered through wouldn’t take hold until around 2014. Thus if a Republican president took office in 2013, there was a real chance that he could dismantle, or at least strongly interfere with, the new framework for health care and financial regulations. And it was clear by 2010 that movement conservatives would make the repeal or collapse of both bills a litmus test for all Republicans in office.

But with President Obama’s victory last week, the core framework of Dodd-Frank, the financial reform bill he signed in 2010, will become the law of the land. The question now is how to best push it forward in the coming months and years.

The most sensible, immediate reform would be to give regulators the adequate resources necessary to do their jobs. The CFTC had its funding cut by both parties last year in a move that will make their crucial work even harder to accomplish. The GOP is aiming to remove the independent funding stream for the CFPB. Without decent resources, it is unlikely that financial reform will be carried out effectively.

The next goal will require new reforms to draw some lines on the issues that haven’t been implemented well after the initial passage of the law. The Volcker Rule continues to be a mess while rules are being written. There isn’t a clear vision for what important new offices like the Office for Financial Research will set out to accomplish. These are major pieces of the legislation and are essential to creating fair, accountable, and transparent markets.

Fleshing out the post-Dodd-Frank agenda is also crucial. What should the proper regulations, if any, of high-frequency trading look like? Is breaking up the banks necessary for eliminating Too Big To Fail and the power of the financial firms over the markets, as a larger chorus of experts is starting to argue? How important is the government in preserving middle-class access to a 30-year fixed interest rate mortgage loan?

Fighting off a bi-partisan effort to make Dodd-Frank more industry-friendly will continue to be a full-time battle. But even though we don’t have to worry about the party in power repealing what has already been put into place, there’s no excuse for neglecting to articulate a vision for a financial sector that serves the greater interests of the real economy.

Mike Konczal is a Fellow at the Roosevelt Institute.

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Obama Can Thank Women Voters By Supporting Real Economic Equality

Nov 15, 2012Bryce Covert

As part of our series "A Rooseveltian Second Term Agenda," a way to recognize the economic needs of the women who helped re-elect President Obama.

As part of our series "A Rooseveltian Second Term Agenda," a way to recognize the economic needs of the women who helped re-elect President Obama.

Both candidates spent a lot of time and energy courting women’s votes this cycle. But as predicted, the gender gap yawned on Election Day and pushed Obama to victory with a 10-point gender gap between him and Romney. How can President Obama thank the women who voted for him as he starts shaping the agenda for his second term? There are a variety of general economic policies that will benefit everyone, including women, such as spending federal stimulus money to kick-start a sluggish economy, ensuring the jobs being created in the recovery pay enough to support workers and their families, and bolstering a failing safety net to support the most vulnerable among us.

But while women hold down half of the jobs in our economy, they still face unique challenges and obstacles to full economic equality. If President Obama cares about women’s economic welfare as much Candidate Obama indicated, there are some important issues he can take on in the next four years.

  1. Truly equal pay for equal work: President Obama often talks about the fact that the first bill he signed into law was the Lilly Ledbetter Fair Pay Act, which helps address the gender wage gap. The act gives women more time to file a claim alleging discrimination since the truth may take a long time to surface. But while the act gets talked about like a panacea, it’s far from it. The number of pay discrimination complaints filed with the EEOC fell since the signing of the act while the pay gap widened. This is because the gap is caused by a complex array of factors: occupational segregation, hostile courts, and plain old discrimination. A first step to supplement the Lilly Ledbetter Act would be prohibiting salary secrecy, forcing employers to allow employees to talk about their pay with each other, something half of all workers cannot currently do. It will be next to impossible for women to address discrimination if they don’t even know it’s happening. But we also have to talk about how to move women into nontraditional fields, appoint judges to the courts that will stand by women when they sue for discrimination, and raise pay for the service sector jobs that women already dominate. These are large issues, but without putting them on the agenda they’ll continue to hamper women’s equality.
  1. Paid time off to care for family: We are one of just three countries among 178 that doesn’t guarantee any paid maternity leave benefits. Fifty countries go further to offer leave for fathers. Among the 15 most competitive nations, we’re the only one that doesn’t have a paid sick days policy. The reality is that the work of caring for children – when they’re very young, sick, or not in school – still falls mostly to women. Yet they can still lose their jobs when they need to miss work for this important caretaking. And without offering paid benefits, we force many women to take on debt or go hat in hand to loved ones and friends to get through. Not only will paid family leave benefit women, it will benefit men and help to change the care work equation. Men are more likely to take time off to be with a new child if the leave is paid – unsurprisingly, since families have such a hard time financing the lost income. And when men do take leave, they become more involved in their children’s lives. Universal, paid leave policies improve quality of life for all workers while leveling the playing field for women.
  1. Significant support for child care: There are two sides to child care. On one are those who need help caring for family and as mentioned above, they are almost entirely women. On the other are the caregivers, also almost entirely women. Our support for child care is pretty dismal and getting worse. The cost of putting two children in center care exceeds median rent in all 50 states. At the same time, the majority of states have pulled back on child care assistance for two years in a row. The Child and Dependent Care Tax Credit that gives parents who are paying for child care a tax break has only increased once in the last 28 years. The government needs to invest heavily in supporting working parents, men and women alike, with skyrocketing child care costs, allowing all who can and want to go to work to leave their children with quality caretakers. This is also a way to begin ensuring that these caretakers are well paid. In a national survey of in-home child care providers, the most common answer to how much they make in a week is $500, or $26,000 a year – a pitiful amount, not to mention that many don’t receive any benefits. Given how much families struggle with the cost and how many domestic workers don’t make enough to live on, the government must step in.

American women have flooded the labor market in the last half-century. But our economy and society haven’t changed enough to meet them halfway. President Obama won’t be able to fix all of these problems in his second term. But he can begin to address them and put a spotlight on these societal problems that we still think of as private concerns. I’m sure women voters would be grateful.

Bryce Covert is Editor of Next New Deal.

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President Obama's Three Necessary Tasks: Cut the Debt, Goose Growth, and Prepare for the Future

Nov 15, 2012Bo Cutter

As part of our series "A Rooseveltian Second Term Agenda," a way forward if Obama wants to really get things done.

I'm writing this under the following key assumptions: that President Obama actually wants to accomplish something and that he doesn't want simply to play small ball. If these assumptions hold, then President Obama must (1) clear away the underbrush, (2) shore up short-run growth, and (3) acknowledge and prepare the country for the on-going economic transformation.

As part of our series "A Rooseveltian Second Term Agenda," a way forward if Obama wants to really get things done.

I'm writing this under the following key assumptions: that President Obama actually wants to accomplish something and that he doesn't want simply to play small ball. If these assumptions hold, then President Obama must (1) clear away the underbrush, (2) shore up short-run growth, and (3) acknowledge and prepare the country for the on-going economic transformation.

Clearing away the underbrush means confronting and solving the nation's slow moving debt and deficit crisis. We do not have to turn ourselves inside out to solve this problem tomorrow, but we do have to put in place plausible, real policies to solve it over the next 10 years. Progressives insist on ignoring the problem but it is real and will not go away. Therefore, as his first step the president should immediately endorse Simpson-Bowles and ask, as I've written elsewhere, Simpson, Bowles, Rivlin, and Domenici to lead the effort to pass legislation by June 2013.

Shoring up short-run growth means putting in place a two-year modest stimulus program - roughly 2 percent of GDP each year - calculated to raise the growth rate of our economy to around 3 percent. This stimulus should consist roughly of 50 percent tax cuts and 50 percent budget support to states and cities. The right regards any stimulus as anathema; the left wants a reprise, but bigger, of the 2009 stimulus. Both of these alternatives would do more harm than good, and in any case, a presidential commitment to a very large stimulus would guarantee no stimulus after a protracted, enervating battle.

Preparing for our on-going economic transformation means first restructuring our tax system so that we invest more in the private sector and consume less. A swing of two or three percentage points would do wonders for our economy in the long run. To do this we should replace a part of our existing tax structure with a small value added tax, and substitute part of the payroll tax with a carbon tax. Next it means putting in place a 10-year public infrastructure investment program of about 1 percent of GDP annually. And finally, it means defining and starting the next revolution in American education.

Many Americans think the country is headed in the wrong direction. The president's popularity has consistently hovered at barely 50 percent. And both presidential campaigns were almost unremittingly negative.

Just scraping by this way should occasion some soul searching. The president must see that the White House and the presidency were not managed tightly or strategically well enough in the first term. In particular, the president's overall strategy was neither focused sufficiently or explained well (if at all) or advocated consistently. To accomplish anything at all, the president will have to provide a clear, simple, short plan to the American people, explain over and over why it matters, and design his White House so he can get this done. 

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

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Going on the Offensive Against Poverty in America

Nov 14, 2012Georgia Levenson Keohane

As part of our series "A Rooseveltian Second Term Agenda," suggestions for how Obama can get serious about combating poverty.

As part of our series "A Rooseveltian Second Term Agenda," suggestions for how Obama can get serious about combating poverty.

Hurricane Sandy’s violence was a tragic reminder of some important truths in American life: climate change matters, government matters, and caring for the vulnerable – for those severely afflicted by circumstances beyond their control – not only matters, it is the essence of who we are as a people. Today, our country’s vulnerable include the 46 million people – nearly one in six – who live in poverty, and 16 million of those are children. This deprivation is particularly grievous in context: earnings for the wealthiest continued to grow last year, while income for the rest stagnated or fell. These levels of poverty and inequality are not only unconscionable, they threaten our economic security.  When it comes to fighting poverty, what do we make of the Obama team’s record and, more importantly, what should be its priorities for the next four years?

The Poverty of the Debate on Poverty

Poverty’s notable absence during the campaign season disappointed and galvanized many progressives who hoped to insert the issue into the election platform and political debates. Those concerns echoed earlier remonstrations that that the president had failed to address poverty over the last four years with the passion or federal muscle promised in his 2008 campaign. “Barack Obama can barely bring himself to say the word ‘poor,’ Bob Herbert wrote this spring in The Grio. Paul Tough, Herbert’s public conscience heir at the New York Times, explains the political conundrum behind the administration’s focus on the economic woes of a broader set of struggling Americans rather than on the poorest per se: “how do you persuade voters to devote tax dollars to help the truly disadvantaged when the middle class is feeling disadvantaged itself?”

While we may long for the soaring rhetoric of 2008, the fact is these broad-based policies have worked. They have not eradicated poverty, but many important domestic programs – the stimulus, in particular, which included new and expanded tax credits, enhanced unemployment insurance, and increased eligibility for food stamps – kept an estimated seven million out of poverty and cushioned against even greater hardship for more than thirty million people already below the federal threshold. Not to mention that health care reform extended coverage to tens of millions of uninsured Americans (in part by expanding access to Medicaid). The federal poverty measure does not take into account non-cash transfers, including food stamps, housing subsidies, and health care benefits like Medicare and Medicaid. When these are factored in, it appears as though poverty has not increased under Obama’s tenure.

Pivot from Defense to Offense

When it comes to a new kind of war on poverty, the Obama administration must recognize that it now has the freedom – and, arguably, an electoral mandate – to address need in this country in ways that serve the struggling middle class and target programs and policies to help the poor. This is not an either/or proposition. And of course job creation is the primary lever: there is no better way to help all Americans in the next four years and beyond.

In terms of programs to address persistent poverty, however, Obama’s second term agenda must pivot from defense to offense, graduating from “could have been worse” blood staunching to an even greater commitment both to long-term investments in human capital and interim supports that shield children and families from some of the most severe privations of life in poverty.  Here are three places to begin:

(1)  Redouble investment in comprehensive and community-wide approaches to fighting poverty. Tough laments that, while in 2008 Obama called for “billions” for programs like Promise Neighborhoods that are modeled on Harlem Children’s Zone’s and provide a broad swath of interventions for poor children and their families, the administration to date has spent just $100 million on pilot programs in 37 communities across 18 states. Ongoing and expanded support for these kinds of holistic programs in cities across the country would make for a sound investment in human potential, using federal structure and funds to support local and community generated solutions.

(2)  Commit more fully to investments in high quality early childhood education and childcare, which yield substantial returns in the school success and life prospects of low-income children and their working parents. This means expanded tax credits and other financial supports for families paying for childcare. It also means increased funds for proven programs like Head Start and Early Head Start, particularly when state governments across the country, with budgets in crises, have been forced to cut Pre-K programs. Head Start and Early Head Start are chronically underfunded and therefore do not reach many eligible families.

(3)  Reform welfare reform, so that it provides real ‘safety’ for poor families in tough economic times. Although it has long been touted as a success of the Clinton administration, the 1996 welfare reform, which devolved much of TANF to the states and linked cash assistance to stringent work requirements, was structurally flawed. First, it was not indexed for inflation (and is funded at its 1996 level). Second, as a block grant it leaves poor people dependent on (now) cash-strapped states for support. Third, the original work requirements were predicated on the existence of work, not on the stubbornly high unemployment rates of this recession. The federal government must reclaim a greater role in the redesign and provision of temporary assistance for needy families to help keep them out of extreme poverty in the way it has done with other critical strands of the safety net like food stamps and unemployment insurance.

With this second term, the Obama administration has the chance to broaden opportunity and to make vital advances in the fight against poverty.  

Georgia Levenson Keohane is a Fellow at the Roosevelt Institute.

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