America's Tax Code Is Broken, But the Rubio-Lee Plan Won't Fix It

Mar 4, 2015Eric Harris Bernstein

"We believe that America’s best days are still ahead. But we also recognize that restoring the shared prosperity that comes from a strong economy requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system."

-Senators Marco Rubio and Mike Lee 

Finally, something we can all agree on. 

"We believe that America’s best days are still ahead. But we also recognize that restoring the shared prosperity that comes from a strong economy requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system."

-Senators Marco Rubio and Mike Lee 

Finally, something we can all agree on. 

In their joint op-ed in this morning's Wall Street Journal, the two Republican senators proposed a new tax plan and argued that our current federal tax structure is broken, its problems "rooted in the same fundamental unfairness and inequity of a government that picks winners and losers."

Again, we here at the Roosevelt Institute welcome this realization. For too long, our tax code has helped the few at the expense of the many. Unfortunately, an analysis of their proposed solutions shows that the senators have come out on the wrong side of this argument. 

First, they propose lowering the top corporate tax rate to 25 percent. This would be a step worth discussing if not for the fact that, with offshore tax havens and a wealth of other tax benefits, America's largest corporations currently pay an effective rate of just 12.6 percent. In the words of Roosevelt Institute Chief Economist Joseph Stiglitz, it would seem that the problem is not double taxation, but no taxation.

The senators then argue that, in order to incentivize investment, they would make all capital expenditures 100 percent tax-deductible, suggesting that taxes have squeezed corporations out of the investment business. But if this is the case, then how do we explain the $2 trillion currently being held abroad by America's largest corporations? And what about the enormous sums that companies like Apple and Home Depot are spending on buybacks to enrich investors? 

In fact, new research from Roosevelt Institute Fellow J.W. Mason shows us that the link between corporate cash flow and productive investment has been all but severed since the shareholder revolution of the 1980s. Shareholders now pocket an increasingly large portion of corporate earnings and borrowing that would have once gone to capital investments, job creation, or raising workers’ pay. Given these facts, as well as the current level of historically high profts, it is clear that corporate investment is not suffering from lack of funding, and that more spending on corporate welfare is the wrong way to go.

Lee and Rubio suggest that corporate taxes drive American industries abroad. This is absolutely true: Corporations want to benefit from American security, infrastructure, and human capital, but they don't want to pay their share to maintain those invaluable assets, so they shelter themselves in tax havens like Ireland. The problem, from our point of view, is not, as Rubio and Lee suggest, that the tax code taxes corporations (indeed, that is what a tax code exists to do); the problem is that it allows wealthy corporations to avoid those taxes. 

We need policies that will ensure corporations contribute like the rest of us, not ones that will commit more public money to private enterprise. 

The senators state that their plan is guided by the principles of fairness, freedom, and growth. This raises the question: In whose mind is it fair to spend hundreds of billions of dollars on wealthy corporations, while Americans drive on pothole-pocked roads and send their children to overcrowded schools to learn from underpaid teachers?

For the individual income tax, Rubio and Lee propose reducing the number of brackets to two -- one at 15 percent and one at 35 percent. Even though they have been greatly reduced since the 1980s, lowering rates for middle-income earners is worth discussing. The far more significant part of this proposal, however, is the 11 percent tax break for top income earners, which would further reduce the amount of public funds available for things like roads and schools, and which would further tip our economic balance toward the wealthy.

The senators would likely argue that this tax break will stimulate productive spending, but trickle-down economics did not work under Reagan and will not work now.

Toward the end of their op-ed, the authors posit a series of pro-family tax reforms, like tax credits for children and tax breaks for couples filing jointly. These policies are rooted in a belief that families with married parents are more economically stable and productive than single-parent families. Again, this may be a point worth debating, but these miniscule incentives are scarcely more than lip service to the American middle class, which this plan largely forsakes in favor of more tax cuts for large corporations and the wealthy. 

More generally, Rubio and Lee frame their entire plan as a benefit to average Americans, but do this while glossing over policies that will only continue our current trend of supporting the wealthy at the expense of the country as a whole. The Stiglitz tax reform plan, on the other hand, offers a blueprint for a tax code that would bolster the middle class while driving growth and opportunity. 

Now that we’ve all agreed on the problem, we should look to solutions that economists tell us actually work.

Eric Harris Bernstein is a Program Associate at the Roosevelt Institute.

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Four Ways to Prune a Rose: Why the NYT Missed the Mark on the Inequality Debate

Feb 19, 2015Eric Harris Bernstein

On Tuesday, the New York Times' data-minded blog The Upshot posted an article reporting on an inequality study performed by Georgetown University's Stephen J. Rose. The article's title boldly stated that "Inequality Has Actually Not Risen Since the Financial Crisis."

On Tuesday, the New York Times' data-minded blog The Upshot posted an article reporting on an inequality study performed by Georgetown University's Stephen J. Rose. The article's title boldly stated that "Inequality Has Actually Not Risen Since the Financial Crisis."

Although the study's analysis is mathematically correct, the study is framed and conducted in a way that makes its findings irrelevant to the larger discussion of inequality in America. Here's why:

1.    Rose's study examines income and ignores wealth, which is actually the most stark indicator of inequality in America today; the top 10 percent owns 93 percent of all stocks and 61.9 percent of all wealth. This is equivalent to judging someone's wealth by looking at their paychecks without considering the value and appreciation of the businesses, houses, cars, and bank accounts that are also in their name.

2.    Rose's analysis ends in 2011, so he does not consider the ongoing recovery, the majority benefits of which are once again going to the very wealthy.

3.    The current inequality dialogue, championed by Capital author Thomas Piketty and Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz, specifies that wealth is the primary driver of inequality, so singling out income makes the Rose study irrelevant to the important public discourse going on today.

4.    Even if we were to accept the income-only study as valid, there are many facts that call Rose's findings into question:

  • The income group he describes fell from a record historical high to a slightly lower historical high.
  • Higher incomes have continued to recover since the study's statistical conclusion.
  • The primary reason lower incomes didn't fall further is that they were bolstered by government transfers (see chart and caption below).

Rose examines post-tax-and-transfer figures rather than pre-tax-and-transfer figures and argues that this supports his thesis of declining inequality. In fact, the difference is largely due to the rising number of individuals who paid less taxes and qualified for more government benefits due to their loss of income. A greater number of people dependent on government assistance would not fit most definitions of a reduction in inequality.

Eric Bernstein is a Program Associate at the Roosevelt Institute.

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The Politics of Responsibility – Not Envy

Feb 11, 2015Richard Kirsch

Americans are looking for politicians who ask the wealthy to take responsibility for their fair share of our society.

According to former Treasury Secretary Larry Summers – who is emerging as a key economic advisor to Hillary Clinton – the big political challenge in addressing economic inequality is not to embrace “a politics of envy.”

No, Mr. Summers – it’s not the politics of envy. It’s the politics of responsibility.

Americans are looking for politicians who ask the wealthy to take responsibility for their fair share of our society.

According to former Treasury Secretary Larry Summers – who is emerging as a key economic advisor to Hillary Clinton – the big political challenge in addressing economic inequality is not to embrace “a politics of envy.”

No, Mr. Summers – it’s not the politics of envy. It’s the politics of responsibility.

Summers was quoted in The New York Times about “what has emerged as a central question of her [Hillary Clinton’s] early presidential campaign strategy: how to address the anger about income inequality without overly vilifying the wealthy.”

The rich may imagine that blaming them for the struggles of the rest of us is driven by envy, but that’s their own conceit to make them feel good. Americans don’t resent the rich. While we might fantasize about winning the lottery, we are not consumed by jealousy. What most Americans understand is that they are struggling financially because the wealthy have rigged the economic and political system to benefit them at the expense of the rest of us. That’s not envy: it’s reality.

Summer’s formulation is meant to give intellectual cover to the real problem that Democrats like Clinton face: taking on those who finance their political campaigns. As the Times puts it: “And she [Clinton] must convince a middle class that feels frustrated and left behind that she understands its struggles, even as she relies heavily on the financial industry and corporate interests to fund her candidacy.”

There is a way to connect with people without “overly vilifying the wealthy.” The politics I would recommend to Clinton and other Democrats is that of responsibility.

There are two senses in which we can have a conversation about responsibility. The first is in explaining who is responsible for the financial squeeze on American working and middle class families. The second sense is to describe the kind of responsible behaviors that we can insist those who are responsible undertake to rebuild opportunity and security. The two are related, as one needs to be clear on who is responsible in order to identify how to fix the problem.

For example, wages are stagnant because corporations engaged in concerted strategies to limit the proportion of profits shared with workers, including: busting unions, rather than negotiating with them; shipping jobs overseas rather than paying higher wages to American workers; and aggressively using campaign contributions and lobbyists to undermine labor standards (minimum wage; overtime protection; etc) and labor laws. Corporations spent their huge profits on stock buybacks and CEO pay, rather than better compensation for workers.

Then there’s Wall Street’s culpability for using its political clout to shred financial regulations and oversight while engaging in the orgy of financial speculation and predatory lending that triggered the Great Recession.

Or tax policy, where corporations pushed to reduce their proportion of taxes paid to the federal government and by the wealthy so that they now pay a lower share of taxes than the middle-class. The result:  working and middle class families pay higher taxes and more for public services. A glaring example is the enormous rise in the cost of public higher education, as funding for public colleges and universities has been slashed.

The economic story about who is responsible requires acknowledging the democratic story. One thing that Americans on the left and right agree on is that the wealthy and corporate lobbyists have hijacked our democracy. That’s not cynical – it’s true. And it is a major reason why so many have given up on government working for them, or solving the problems they face.

None of this is “over-vilifying the wealthy.” It is describing the reality that Americans understand. As we saw in the election this past fall, Democrats who fail to identify those responsible will lose, as base Democrats stay home and white working-class voters turn to Republicans who assign blame to the government and the poor.

Identifying those who are responsible, as I’ve done above, drives the power of solutions to address those problems. For example, corporate suppression of wages is fixed by: revitalizing labor law and enforcement; raising labor standards like minimum wage and earned sick days; creating new workplace protections, like paid family leave; changing the rules on stock buy-backs; and limiting CEO compensation.

Addressing the adverse impact of Wall Street’s drive for speculative profits calls for taxing speculative trading, breaking up the big banks, stopping predatory lending, and providing new, publicly backed mechanisms for financing the residential and community lending that banks have abdicated.

Revenue raised from reversing tax breaks for corporations and the very wealthy can be used to invest in services families need like affordable child care and free community college, proposals in President Obama’s new budget.

Instead of vilifying the wealthy, the politics of responsibility can lift up corporate leaders and wealthy Americans who are examples of responsible behavior. President Obama has done this occasionally, for example, lauding Costco for its high pay and good benefits for big box stores. Last week, Aetna announced it was going to raise wages and benefits for its lowest-wage workers. Warren Buffett has a “rule” bearing his name, for proposing that the wealthy shouldn’t pay lower shares of taxes than their secretaries. Buffett’s example is particularly important because he’s calling for government action, not just setting an example through his own behavior.

The handful of corporate leaders who are acting responsibly are also acting in their own long-term self-interest. They understand that their businesses do better with workers who get paid decently. They realize they need an educated workforce. They may even comprehend that if workers get paid more, they’ll have more to spend, driving the economy forward.

The real emotional challenge in addressing inequality is not envy by the 99 percent for the 1 percent. It’s the very thin skins of the super-rich. President Franklin D. Roosevelt, born one of the 1 percent, understood this. FDR framed the question of wealth and responsibility brilliantly when he said:

Government can deal and should deal with blindly selfish men. But that is a comparatively small part – the easier part of our problem. The larger, more important and more difficult part of our problem is to deal with men who are not selfish and who are good citizens, but who cannot see the social and economic consequences of their actions in a modern economically interdependent community. They fail to grasp the significance of some of our most vital social and economic problems because they see them only in the light of their own personal experience and not in perspective with the experience of other men and other industries. They, therefore, fail to see these problems for the nation as a whole.

There were some prominent capitalists who supported New Deal programs, including banking reforms. But of the rest, FDR famously said, “I welcome their hatred.”

At the end of the day if Hillary Clinton or any other Democrat is going to champion the policies essential to rebuilding the middle-class and creating a new era of broad, sustainable prosperity, she will have to join FDR in applauding those businesses who worked for the benefit of all and welcoming the hatred of those who resist the fundamental changes needed to build an America that works for all of us.

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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The Obama Budget: Weak on Reproductive Health

Feb 9, 2015Andrea Flynn

Family planning is both vital for econoimc stability and a solid investment with strong returns, so why wasn't it better funded in the President's budget?

Family planning is both vital for econoimc stability and a solid investment with strong returns, so why wasn't it better funded in the President's budget?

Last week President Obama unveiled a 10-year budget that reflects the ambitious and progressive agenda he laid out in his State of the Union address. With investments in infrastructure, education, and economic supports for the middle class, the President’s funding plan aims to lift up low-income families and address the growing and historic U.S. class divide. But Obama has fallen short on one area that is critical to women and families: reproductive health.

There were hopes that the president would request a significant increase for Title X – the nation’s only program dedicated to providing quality, affordable reproductive health services – and also the repeal of the Hyde Amendment, a 1976 law that prohibits women from using federal health benefits such as Medicaid to pay for abortion, except in cases of rape, incest, or life endangerment. But Obama did neither.

Given conservative control of Congress, President Obama’s budget has little chance of being passed as is. But as John Cassidy pointed out in the New Yorker this week, the budget is as much a political document as it is an economic one. “The White House is using it to frame the political debate for this year and for the run-up to the 2016 Presidential election – an effort that began with the State of the Union address,” Cassidy wrote. Obama had an opportunity to show that reproductive health is a critical component of any agenda meant to lift up low-income families, and one the federal government must invest in if their other efforts are to bear fruit. But he missed that opportunity.

The president’s $300 million request was a modest increase from last year’s budget of $286.5 million – Title X’s first increase since 2010 – but still leaves the program woefully underfunded. Title X has still not recovered from the drastic cuts it endured between 2010 and 2013, when lawmakers cut the budget from $317 to $278 million, and as a result prevented 667,000 patients from receiving care. Family planning experts estimate that in order to completely fulfill the nation’s unmet need for reproductive health care, Title X would require somewhere in the ballpark of $800 million, a far cry from today’s budget.

Title X is like the little engine that could of public programs. It prevents more than one million unintended pregnancies annually, and thereby avoids nearly 600,000 unplanned births and more than 400,000 abortions. Without Title X, the U.S. unintended pregnancy and abortion rate would be 35 percent higher among adult women and 42 percent higher among teens. Not to mention that in 2010 every dollar invested in Title X saved $5.68. How’s that for a return on investment?

Not only is the program underfunded, but in states across the country conservative lawmakers have implemented restrictions that have prevented Title X funds from actually going to family providers, effectively chipping away at what was once a robust health safety net and exacerbating a pre-existing shortage of reproductive health providers. It is largely low-income women, women of color, immigrant women, and young women who are left without anywhere to turn for preventative care.

And what happens when those women find themselves needing to terminate a pregnancy? Between the restrictions set forth under the Hyde Amendment and the rapidly shrinking network of abortion providers, they have few options. In 1976 – just three years after the Supreme Court’s Roe v. Wade decision legalized abortion – Congress passed the Hyde Amendment and made abortion the only medical procedure ever banned from Medicaid. Ironically, Medicaid covers all the costs related to family planning and pregnancy.

By this point, you might be thinking this is all irrelevant, thanks to the Affordable Care Act (ACA). If only. While the ACA has extended care to scores of women who were previously uninsured, conservative opposition has diluted its potential impact and many people will remain without health coverage. Indeed, nearly four million women will be left without coverage this year thanks to conservative opposition to expanding Medicaid. In addition, federal restrictions ban many immigrants from Medicaid, the contraceptive mandate has been compromised and contraception is now your boss’s business, and this term the Supreme Court may very well take federal subsidies away from millions who need them in order to afford health insurance.

We need an increased investment in reproductive health now more than ever. If we are serious about improving the circumstances of low- and middle-income U.S. families, we must extend critical care and services to all of those who need and want them, and also shape the political debate in a way that will give all women and families all of the tools – not just a select few – that they need to thrive.

When the president, who espoused his support for reproductive rights in his State of the Union address, doesn’t push for a significant expansion of reproductive health care while he is putting his political capital behind broader education, income, and work-family supports, it signals that reproductive health, perhaps, is not as critical as these other issues. It suggests that with other supports women can lead economically secure lives, even if they cannot control their fertility and determine the timing and size of their families. That is simply not the case.

An agenda without bold investments in reproductive health is not a comprehensive agenda for women and families. And if women cannot access quality and affordable health care, they will not be able to make the most of the other important initiatives the president has proposed.

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter @dreaflynn.

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Daily Digest - February 4: Looking to History to Understand Today's Civil Rights Movement

Feb 4, 2015Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How Radical Change Occurs: An Interview With Historian Eric Foner (The Nation)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

How Radical Change Occurs: An Interview With Historian Eric Foner (The Nation)

Roosevelt Institute Fellow Mike Konczal interviews Eric Foner about teaching the Civil War online and the relevance of the Civil War and Reconstruction eras to our current political moment.

Would FCC Plan Harm Telecom Investment? Even Industry Opinion Is Mixed (NPR)

Joel Rose speaks to Roosevelt Institute Fellow Susan Crawford, who says the telecommunications industry changes its tune based on audience: only regulators are told regulation will kill investment.

Is Ending Segregation the Key to Ending Poverty? (The Atlantic)

Alana Semuels takes a close look at programs that have helped families move to less segregated and wealthier neighborhoods, moves which have generally positive outcomes for children.

Obama’s Budget Puts Historic Focus on Child Care and Working Families (AJAM)

E. Tammy Kim and Joanna S. Kao suggest that the president's proposals around child care and other programs supporting working parents have the most bipartisan potential this year.

Walmart Cut My Hours, I Protested, and They Fired Me (MoJo)

Kiana Howard explains how Walmart illegally retaliated against her for union organizing, something she got involved in when they cut her hours for requesting a public transit-friendly schedule.

Americans Overestimate Class Mobility (Pacific Standard)

Tom Jacobs reports that in four new studies, Americans overestimate the extent to which working more or going to school can increase wealth by about 23 percent.

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Daily Digest - January 28: Raising Rates is a Rising Challenge

Jan 28, 2015Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

Janet Yellen's second year as Federal Reserve Chair begins with the difficult task of creating consensus on raising interest rates, write Jon Hilsenrath and Pedro da Costa.

U.S. Companies Cut More Than 1m Jobs a Month. When Did Workers Stop Mattering? (The Guardian)

Suzanne McGee points at large-scale layoffs at big name companies that seek to raise their stock prices as a sign that the U.S. economy no longer sees workers as a worthwhile investment.

You're Probably Richer Than You Think You Are: How Inequality Screws With Our Perspective (The Week)

Jeff Spross says that arguments over proposed changes to college savings accounts demonstrate just how easily some Americans lose sight of how high they sit within the economy.

How Bernie Sanders, In New Role, Could Make Wall Streeters Very, Very Unhappy (TAP)

Ari Rabin-Havt explains how Senator Sanders plans to use his new role as ranking member of the Senate Budget Committee to take on too-big-to-fail and other financial regulatory issues.

Shutting Down New York’s Subways Is Very Expensive (NYT)

If only 10 percent of New York's workforce was unable to work because of the subway shutdown, Josh Barro estimates that the cost in lost labor would be around $160 million.

Al Franken’s Massive New Target: Why He’s Taking on Shady Credit Rating Agencies (Salon)

A major fine for Standard & Poor's shows that Senator Franken's proposal to base credit ratings agencies' compensation on the accuracy of their ratings is still needed, writes David Dayen.

Answering President Obama’s Call, House Introduces Paid Sick Leave Bill for Workers (In These Times)

Kevin Solari reports on the introduction of the Federal Employees Paid Parental Leave Act, one of many ways to expand paid leave in order to attract top talent to government jobs.

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Daily Digest - January 27: For Some Workers, A Snow Day Puts Jobs at Risk

Jan 27, 2015Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

No Snow Days for Low-Wage Workers (AJAM)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

No Snow Days for Low-Wage Workers (AJAM)

Most low-wage workers don't have the option of missing work during snowstorms, writes E. Tammy Kim, and may risk being fired if lack of public transit prevents them from getting there.

Supreme Court Rules Against Retirees in Union Health Benefits Case (NYT)

Adam Liptak reports on the Court's decision in M&G Polymers USA v. Tackett, which holds that a contract that doesn't specify whether retiree health benefits are for life shouldn't be assumed to do so.

The Dark Side of ‘Sharing Economy’ Jobs (WaPo)

Catherine Rampell points out that companies like Uber are shifting much of the risk inherent in their businesses to workers who are defined as independent contractors and lack protection.

A Staggeringly Lopsided Economic Recovery (The Nation)

Zoë Carpenter looks at a new study from the Economic Policy Institute about the 1 percent's gains during the recovery, which shows that group captured at least half of growth in most states.

Why de Blasio Was Right to Take on Criminal Justice Reform (Slate)

Jamelle Bouie says that since excessive policing caused economic problems, like job loss, in communities of color, Mayor de Blasio's criminal justice reform has also served as economic populism.

New on Next New Deal

Did Ending Unemployment Insurance Extensions Really Create 1.8 Million Jobs?

Roosevelt Institute Fellow Mike Konczal says probably not, because the study making this claim has problematic models and technique, as well as "noisy" confusing data.

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Roosevelt Reacts: What Else Did We Need From the 2015 State of the Union?

Jan 23, 2015

Roosevelt Institute | Campus Network members and alumni weigh in on President Obama's sixth State of the Union address.

Brett Dunn, University of Alabama '17:

Roosevelt Institute | Campus Network members and alumni weigh in on President Obama's sixth State of the Union address.

Brett Dunn, University of Alabama '17:

In the face of strong Republican opposition, President Obama made his stance on many controversial topics quite clear. He outlined his views on topics such as the minimum wage, equal pay for women, LGBTQ+ rights, tax reform and more. These bold and somewhat ambitious goals for change in 2015 will require bipartisan compromise in Congress. It is likely, however, that there will be little correlation between President Obama’s bold vision for the future of the United States and Congress’ actions in the final two years of his presidency. No matter how wonderful or ambitious President Obama’s plans are for the country, the likelihood of any these issues being independently addressed by a Republican controlled Congress is very slim. Yet the president’s plans do not fall on deaf ears. President Obama’s speech gives Democrats in Congress and, more importantly, the American public, ammunition against the Republican’s inevitable inaction, which could potentially help set the stage for the 2016 election.

Chisolm Allenlundy, University of Alabama '16:

It was difficult to miss the amount of politics that happened on Tuesday at President Obama’s next-to-last State of the Union address. What might have been easy to miss, however, was the meaning of it all.

President Obama knows that his days of passing game-changing progressive legislation are over. This is a common position for 4th-quarter presidents to find themselves in, and Obama did exactly what such presidents do when they can no longer effectively push for policy change: they push for culture change.

But most Americans don’t watch the political process so much as they hear about it from media sources, which put their own spin on material. According to consumer watch company Nielson, 31.7 million people tuned in for the SOTU, and even that figure is at a 15-year low. While the president has attempted to set the direction for progressive politics for the next year, policy change will be a struggle, and he needs to reach many more Americans to steer the course on our political culture. 

Tarsi Dunlop, Middlebury College '09:

Middle class economics played a key role in the President’s 2015 State of the Union. He explained that middle class economics is about the policies needed for average American families to get ahead. These policies aren’t handouts, but they make daily life better, easier, more fulfilling. For example, what if students could graduate from K-12 with good grades and know they had the option of going to community college without the staggering cost of debt? Granted, there are certain investments that must be made to make sure that community colleges are, as an institution, prepared for the role the President wants them to serve for our nation’s youth.

The President also touched on other elements of middle class economics: key policy proposals that will help young people, new families, and the elderly. He emphasized affordable day care (right now monthly costs can run higher than a mortgage payment), as well as paid family leave and sick leave. Families shouldn’t have to choose between time with new babies and paid work, nor between working and staying home with a sick child. We need a vision and a budget to help the middle class thrive and it was great to hear concrete proposals in the President’s speech.

Hayley Brundige, University of Tennessee, Knoxville '17:

Obama's State of the Union Address illustrated just how far we still have to go in the fight for gender equality. I was ecstatic when Obama asserted that the right to quality childcare and paid maternity and sick leave are not just “women's issues” — as they are often brushed aside as — but a “national economic priority.” But in the back of my mind, I was dismayed that this concept that is so obviously a human right is still so far from being obvious to our elected officials. 

Noticeably missing from the speech was any mention of preventing sexual assault, especially on college campuses. This was particularly surprising seeing as the administration has made this issue a point of focus recently, creating a White House task force on sexual assault and investigating colleges for Title IX violations. Obama even had a readily supplied anecdote, as campus activist and sexual assault survivor Emma Sulkowicz was literally in the audience. As a college student, I applaud Obama's efforts to make community college more accessible, but it's disheartening for him to not address the importance of keeping our campuses safe. No president on record has discussed sexual assault in a State of the Union address.

Zachary Agush, Wheaton College '12:

Over the years, President Obama has always integrated personal stories into his annual State of the Union addresses to paint a visual about the troubles individuals may be facing or to explain how a certain effort can help spark further growth and development for others. I have always considered that a major strength. This year’s speech focused in particular on young families. The President knows that the new generation is quickly becoming the majority of the nation's population and that the lingering inequalities and economic hardships will definitely make it increasingly difficult for them to have the quality of life they desire. This generation is also going to struggle to maintain Social Security and Medicare for those entering these safety net programs in the coming decade. I think those stories in particular hit some members of Congress, even those of the new Republican majority, that something needs to be done to at least give the next generation a chance at success. I am cautiously optimistic that something may happen - but it will only happen if this Congress can actually stop and think about how their gridlock is directly affecting the next generation. Maybe then, there can be progress.

Sarah Hilton, Wheaton College '16:

President Obama made huge strides for education policy on Tuesday night; even raising the issue of rising college tuition is a positive step forward. However, the President hardly mentioned the K-12 system. He praised rising graduation rates and higher test scores then ever before, but ignored the staggering inequality and lack of student performance when compared internationally. Obama’s two-year community college plan, while economically beneficial for the middle class, shows that our base expectations for education continue to require more time and expense.

The focus instead should be on improving the K-12 system we already have by creating more diverse programs that train students for a variety careers from academic to vocational. Today, about half of students begin community college in remedial classes. We should be making our high schools more effective at reaching students. Vocational training for profitable and interesting jobs can be done in high school, and academic programs should be strengthen to reduce the need for remedial classes in community colleges. Strengthening the underlying K-12 system and increasing vocational training would have an earlier impact on our students’ lives.

Jas Johl, University of California, Berkeley '08:

The main rhetorical touch point for the state of the union was 'middle class economics.' Throughout the address, Obama repeatedly turned to that concept, presenting policy ideas designed to bolster it.  Of paramount importance to the ongoing success of middle class, he argued, would be to make the first two years of community college free for all. This proposal does address some of the symptoms of growing economic inequality, namely rising student debt. Nonetheless, it overlooks the underlying, systemic issues at the core of the problem: the broken state of our current education system. 

As The Institute for College Access & Success and the Brookings Institute have both argued, the majority of those attending community college are already getting their tuition covered through Pell Grants and other means of financial support. I’d argue the more pressing issue is the fact that many of the students who enroll in community colleges are ill-prepared for 4-year universities, and spend the first two years of college taking remedial college (read: high school) courses that they didn't do well in or even pass the first time. Free college doesn’t help a student who isn’t ready for it.

Obama makes the very valid point that making those colleges free would assuage the financial burden of a large number of young adults, and likely precipitate a better-prepared workforce. But a glaring absence in the president's speech was acknowledgement of the fundamental cracks in our institutions, namely, our already free K-12 educational system. Real middle class economics necessitate not just free education, but better education for all.

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After Four Decades with Roe, U.S. Women Still Need Abortion Access, and So Much More

Jan 23, 2015Andrea FlynnShulie Eisen

As economic inequality takes center stage in politics, it's important to remember that reproductive justice and bodily autonomy are just as essential for secure lives.

As economic inequality takes center stage in politics, it's important to remember that reproductive justice and bodily autonomy are just as essential for secure lives.

Yesterday’s 42nd anniversary of the Supreme Court’s Roe v. Wade decision prompted a week of stark contradictions. Thousands of anti-choice protesters descended on Washington yesterday while the House of Representatives passed HR7, a bill limiting insurance coverage for abortions (after a broader abortion ban was – for the time – abandoned). Yesterday, Congressional Democrats re-introduced the Women’s Health Protection Act, a bill meant to protect abortion access from the medically unnecessary restrictions that have already made the landmark decision meaningless in many parts of the country. And in his State of the Union address on Tuesday night, President Obama professed his support for abortion rights, along with equal pay, paid sick and family leave, a minimum wage hike, and expanded health coverage. It’s all been a reminder of what has been won and just how much there is left to fight for – from abortion rights to economic security.

Over the past four years we’ve seen an unprecedented number of attacks on reproductive health – more than 200 between 2011 and 2013 – leaving many states with a scant number of abortion providers. Scores of women are now required to travel long distances, at great cost, to access not just abortion, but a wide range of comprehensive health services.

While reproductive health has certainly been the obsession of choice of conservative lawmakers in recent years, it hasn’t been the only issue in their crosshairs. In many ways, the increasing hostility to abortion and family planning is reflective of a broader war against the poor that is sure to persist under the new Congress. It turns out the same lawmakers who have championed abortion restrictions in the name of protecting women’s health have done very little to actually help women and families. Indeed, a recent report from the Center for Reproductive Rights and Ibis Reproductive Health shows that states with the most abortion restrictions also have some of the worst indicators for women’s health and wellbeing. So lawmakers are restricting access to health services at the same time they are dismantling the social safety net on which so many women and families rely. The overall impact has been devastating.

In states across the country, women are struggling under the burden of intersecting health and economic injustices. Let’s look, for example, at Kansas, where conservative Governor Brownback slashed business regulations, cut taxes for the wealthy, nearly eliminated income taxes, and privatized Medicaid delivery, all with the goal of making the state a conservative utopia. In the meantime, Kansas women continue to struggle with high rates of poverty, a lack of health insurance, un- and underemployment, and a persistent wage gap. Kansas is one of the sixteen states that refuse to participate in Medicaid expansion under the Affordable Care Act, leaving nearly 80,000 adults (half of whom are women) uninsured. It is the only state in the country that actually experienced an increase in its uninsured rate last year.

To make matters worse for women in Kansas, lawmakers eliminated abortion access from 98 percent of the state’s counties – in which 74 percent of the state’s women live – and passed House Bill 2253, a 47-page law comprised of countless and senseless abortion restrictions. It included a 24-hour waiting period; medically inaccurate pre-abortion counseling; prohibiting abortion providers from working or volunteering in public schools; banning University of Kansas Medical School faculty members from teaching students and residents how to perform abortions; and eliminating public health insurance coverage of all abortion services. And the list goes on. Sadly these laws are not unique to Kansas and they have significantly diluted the initial promise Roe held four decades ago.

The economic injustices described above, and those being felt by low-income families throughout the country, are starting to get the attention they deserve, and the policy solutions to address them are gaining traction (see the recent support for raising the minimum wage and instituting paid sick and family leave). But while economists and policymakers are increasingly focused on the pernicious impacts of inequality and economic insecurity, they rarely acknowledge how these issues intersect with reproductive health and rights.

Let us use the anniversary of Roe to remember there can be no economic justice without reproductive justice. We can’t win on one front while losing on the other. Reproductive health – a cornerstone of which is family planning and abortion – is not a frill. It is a core component of comprehensive health care, which is a basic pillar of every individual’s personal, social, and economic wellbeing.

What good is better and more equal pay if we can’t plan the timing and size of our families? What good is paid sick and family leave if there are no quality, affordable, and accessible providers to give us the care we need when we need it? We need all of it. Now. That’s just demanding a basic – very basic – floor of wellbeing. And that shouldn’t be too much to ask. Roe has served as part of that foundation for the last 42 years. But conservatives have successfully chipped away at it and will continue to do so until there’s nothing left to stand on. Perhaps we can seize upon the new energy around closing the inequality gap to remind our leaders that without bodily autonomy, we will never be secure.  

Andrea Flynn is a Fellow at the Roosevelt Institute. Follow her on Twitter @dreaflynn.

Shulie Eisen is an independent reproductive health care consultant. Follow her on Twitter @shulieeisen.

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Obama’s Middle Class Economics Has to be About Fairness and Prosperity

Jan 22, 2015Richard Kirsch

The more-fair "middle-class economics" described in the State of the Union are also the right policies to help the economy grow.

The more-fair "middle-class economics" described in the State of the Union are also the right policies to help the economy grow.

In coining the new term “middle-class economics” and linking it to raising wages and taxing the rich and Wall Street to put money in the pockets of working families, President Obama used his State of the Union address to ask the public that most potent of political questions: “Which side are you on?” And as Republicans say no to improving wages and making college more affordable in order to defend the super-rich, Americans will get a clear answer. That’s a sure win for Democrats.

But the President’s explanation of middle class economics downplayed an important part of the story: it’s not just about fairness, it’s about how we create prosperity.

With the term “middle class economics,” the President is creating a contrast between economic programs aimed at boosting the middle-class and the Republican agenda of shrinking government and lowering taxes for corporations. But Obama’s use of the term missed an opportunity to drive home to the American public that middle class economics is not just about fairness, but also about moving the economy forward.

Obama defined middle class economics as “the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.” That is one of the President’s favorite phrases. But for all its appeal, it does not explain how middle-class economics drives economic progress and increases wealth. He fails to replace the Republican story that cutting government, taxes, and regulation are the keys to economic growth.

The President actually included such an explanation of what drives the economy in his 2013 State of the Union address, when he said: “It is our generation's task, then, to reignite the true engine of America's economic growth: a rising, thriving middle class."

Democrats need to firmly claim both the grounds of fairness and prosperity. As I recently wrote, “The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.”

This is an easy case to make, as it’s true for most of the policies in the President’s middle class economic agenda.

To take just one example, raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy-boosting jobs instead of economy-busting jobs. When wages are raised, workers have more money to spend, essential when 70 percent of the economy is made up of consumer spending.

The President’s tax proposals are also about more than just the unfairness of a tax code riddled, as he said, “with giveaways the superrich don't need, denying a break to middle class families who do.” His proposed taxes on risky bank speculation move that money to invest in vital infrastructure. When he proposes raising taxes on the rich, who already have more money than they can spend, and using those funds to make community colleges more affordable, he’s putting that money into the economy and investing in people’s skills to contribute to economic progress.

Fairness is a very powerful American value. That’s why the most successful Democratic candidates in 2014 made it clear that they were on the side of working families against Wall Street.

But the reason that fairness is so powerful is because of the contrast between the few with vast wealth and what Americans most want, to be able to care for and support their families. We value prosperity and security. That is why it is essential that Democrats can tell a clear story about how we move the economy forward. Middle-class economics is about more than fairness – it’s about how working families and the middle class drive the economy. 

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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