If Republicans and the Beltway establishment hoped that Democrats would take a sharp turn to the right in the wake of the 2014 midterms, much of Washington is no doubt disappointed right now.
Kevin Drum noted last week, “One of the hot topics of conversation in progressive circles these days is the middle class. Democrats support plenty of programs that provide benefits to the poor (Medicaid, minimum wage, SNAP, etc.), but what about programs that benefit the middle class?”
Dems arguably already have a pretty solid case to make, pointing to policies like the Affordable Care Act, but the party’s focus is apparently poised to zero in on the middle class with even more specificity this year. This includes, obviously, President Obama’s new proposal on free community-college tuition and talk of pushing for higher wages through overtime regulations.
But as the Washington Post reported overnight, there’s another striking idea taking shape as part of the Democrats’ economic agenda.
Senior Democrats, dissatisfied with the party’s tepid prescriptions for combating income inequality, are drafting an “action plan” that calls for a massive transfer of wealth from the super-rich and Wall Street traders to the heart of the middle class.The centerpiece of the proposal, set to be unveiled Monday by Rep. Chris Van Hollen (D-Md.), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year.
A new fee on financial transactions, coupled with few breaks for the top 1%, would deliver a $1.2 trillion “windfall,” which Van Hollen would invest directly in the middle class.
This is a pretty big deal, not because the idea stands a credible chance in a Republican-led Congress – it doesn’t – but because of what a proposal like this says about Democratic priorities. As Ed Kilgore noted this morning, Van Hollen’s measure is “one of the more frankly redistributive proposals coming from anywhere other than the Progressive Caucus in a good while, and the central prominence of the financial transaction tax makes it a direct shot at Wall Street.”
And in case this isn’t obvious, Chris Van Hollen is a close ally of House Minority Leader Nancy Pelosi (D-Calif.) – so when he presents a proposal like this, the Maryland Democrat is speaking for more than just himself.
“This is a plan to help tackle the challenge of our times,” Van Hollen said, previewing a Monday speech at the Center for American Progress. “We want a growing economy that works for all Americans, not just the wealthy few.”
The details of the package are not yet available, but the Post’s report sketched out the populist plan.
To spur employers to increase pay, the plan would target corporations, prohibiting companies from deducting executive performance bonuses in excess of $1 million, a benefit worth $66 billion from 2007 to 2010. To claim the deduction, companies would have to demonstrate that workers had shared in the company’s good fortunes by increasing wages about 4 percent, on par with inflation and productivity growth.Other provisions would provide incentives to companies that give workers a share of corporate profits and invest in job training, through apprenticeship programs or partnerships with community colleges.Blossoming wages would also stretch further under the plan, primarily through the paycheck bonus, worth $1,000 to individuals and $2,000 to couples. The idea is similar to Obama’s “Make Work Pay” credit, part of the 2009 stimulus package, but Obama’s credit was temporary and, at $400 per person, much smaller.
The fact that the proposal is being presented at the Center for American Progress is itself a notable development – Hillary Clinton, should she proceed with a presidential campaign, is likely to draw heavily from CAP and its staff, suggesting Van Hollen’s idea may yet end up as part of a national Democratic platform, all the while, helping Clinton connect with the growing Elizabeth Warren wing of the party.