Robert Reich: How Democrats Can Become Relevant Again (And Rescue the Nation While They’re At It)

[ProSense]

How Democrats Can Become Relevant Again (And Rescue the Nation While They’re At It)

Tuesday, March 1, 2011

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Democrats have become irrelevant. If they want to be relevant again they have to connect the dots: The explosion of income and wealth among America’s super-rich, the dramatic drop in their tax rates, the consequential devastating budget squeezes in Washington and in state capitals, and the slashing of public services for the middle class and the poor.

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The bottom 90 percent of Americans now earn, on average, only about $280 more per year than they did thirty years ago. That’s less than a 1 percent gain over more than a third of a century. Families are doing somewhat better but that’s only because so many families now have to rely on two incomes.

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Meanwhile, estate taxes (which hit only the top 2 percent) have been slashed, as have taxes on capital gains – which comprise most of the income of the super rich. In the late 1970s, capital gains were taxed at well over 35 percent. Under Bill Clinton, the capital gains rate was 20 percent. Now it’s 15 percent.

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Here’s what Democrats should be saying:

Hike taxes on the super-rich. Reform the tax code to create more brackets at the top with higher rates for millionaires and billionaires. Absurdly, the top bracket is now set at $375,000 with a tax rate of 35 percent; the second-highest bracket, at 33 percent, starts at $172,000 for individuals. But the big money is way higher.

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Reich's suggestions are good, but Clinton was in office for eight years and income for 90 perecent of American still rose less than 1 percent. Something drastic needs to be done.

As for the debate to keep the government funded, Democrats should tell the Republicans to go to hell on the cuts. The government will shut down, but that will be on them.

Also, pushing Reich's suggested changes doesn't mean House Republicans will jump on board. In fact, his suggestions and more are already in the President's budget.

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The president, in a $3.7 trillion budget plan released yesterday in Washington, revived dozens of proposals that Congress has rejected, including $129 billion in higher taxes on the overseas profits of U.S. companies. He also proposed changing the tax treatment of oil, gas and coal companies, which would raise about $46 billion.

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The proposal also would bring back pre-2001 tax rates on income and capital gains for individuals earning more than $200,000 annually and married couples making more than $250,000. The estate tax would return to 2009 levels with a $3.5 million per-person exemption and a 45 percent top rate. Under a law Obama signed in December, lower rates expire at the end of 2012.


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The budget plan would limit itemized deductions for top earners to 28 percent, curbing the value of tax breaks for charitable contributions, home mortgage interest and state and local taxes. That proposal has been included in every budget of Obama’s presidency and was rejected as a revenue-raising provision to fund his overhaul of the health system last year.

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Also included is a $30 billion tax on the largest financial institutions.

If Reich or anyone knows how to get the Republicans on board with this, they need to share their strategy with Congressional Dems and the WH.

Get it done!

[Poiuyt]

1. Robert Reich, as usual, is exactly right

I wish more Washington politicians would listen to him.

[grahamhgreen]

2. The way to get the repubs on board is by drivine a populist "tax the hoarders" message

From the bully pulpit on down.

Second thing to remember is that the Repubs NEVER worry about hOw to get the Dems on board; they drive agenda forward with a clear and consistent message.

Obama needs to talk about taxing the ultra rich (which icludes corporations and ending loopholes) and cutting defense and nothing else when he talks about the budget.

Its very simple.

[ProSense]

7. "Second thing to remember is that the Repubs NEVER worry about hOw to get the Dems on board;

...they drive agenda forward with a clear and consistent message."

Republicans also don't worry about accomplishing anything but messaging. That's is not the goal. Also, if you're going to hype Republicans' message discipline, the politicians, pundits and even bloggers stick to the same messages and dog whistles. Pretty sure no one wants to emulate that.

Still, the President delivered an excellent message that needs to be repeated by everyone, including Demcoratic pundits.

Obama: Public Employees Should Not Be Vilified

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But let me also say this: it does no one any good when public employees are denigrated or vilified or their rights are infringed upon. We need to attract the best and the brightest to public service. These are times that demand it. We’re not going to attract the best teachers for our kids, for example, if they only make a fraction of what other professionals make. We’re not going to convince the bravest Americans to put their lives on the line as police officers or firefighters if we don’t properly reward that bravery. So yes, we need a conversation about pensions and Medicare and Medicaid and other promises we’ve made as a nation.

But as we make decisions about our budgets going forward, I believe everyone should be at the table, and the concept of shared sacrifice should prevail. If all the pain is borne by one group – whether it’s workers, or seniors, or the poor – while the wealthiest among us keep getting tax cuts, we’re not doing the right thing. I think that’s something Republicans and Democrats should be able to agree on.

Summary: Don't vilify public employees; public service is vital; teachers are underpaid; you can't put the burden on workers, seniors and the poor while supporting tax cuts for the rich.

What tends to happen is a statement like this get ignored. It would be good if some of the regulars on talk shows reiterate the good points he makes. Senator Sanders did this often on Social Security:

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“If we are serious about making Social Security strong and solvent for the next 75 years, President Obama has the right solution. On October 14, 2010, he restated a long-held position that the cap on income subject to Social Security payroll taxes, now at $106,800, should be raised. As the president has long stated, it is absurd that billionaires pay the same amount into the system as someone who earns $106,800.

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That reinforces the message and holds the President accountable for his words. If people can use his qoutes from years ago to hold him accountable, they should be willing to use his more recent quotes too. It also helps to ensure that these resonate to counter messaging that's being pushed across the Republican spectrum.

[reformist2]

3. It's uncouth to say "hike taxes on the super-rich." Let's say "return to the tax rates of the 1950s"

It's semantic, but it's an important difference in at least two ways:

1) It avoids the appearance that Democrats are envious of the rich and merely want to redistribute their money, and
2) It reminds voters that tax rates used to be much, much higher, and during a time that most everyone thinks of as economically prosperous.

[JHB]

8. "55 minus 10"

Take the tax rates of 1955, adjust the brackets for inflation, and take 10% off each bracket (i.e., the 22% bracket becomes 12%, etc.). The reduction is necessary because (if I'm correct, but I'm not a tax accountant) a straight inflation-adjusted version would raise taxes at some of the lower brackets (the Reagan cuts did give something while they stole with the other hand).

It's even better if you adjust it not for inflation but for the shift in median income (i.e., where the tax burden lay): the brackets all shift a little towards higher incomes, easing taxes on lower- and mid-incomes, bit still keeping the high rates at the highest end.

This makes it something that:
1) isn't theory, it was something that was in effect in this country when the middle class was expanding, and explicitly reminds people of that fact.
2) isn't "socialism" or "communist" (if we were "socialist" or "communist" back then, what were the Soviets?)

The main strength of the high marginal tax rates isn't really "soak the rich", but in making it harder for the very rich to get more rich in ways that amount to simply siphoning money into their pockets. High-end speculation and liquidation (i.e., Wall Street, FIRE sector "growth") aren't as attractive when most of the payoff stands to go to Uncle Sam. Doing the hard work of creating and producing things (i.e. the real economy) starts becoming a better investment.

As for the inevitable "class warfare" and "punishing success" charges, frame it this way:
We want an economy that works for people who are trying to get ahead, not for those who already are.

[LiberalEsto]

4. The DLC: Mission Accomplished

They managed to turn the Democratic Party into GOP-Lite.

[TBF]

6. You're exactly correct - so the task now is to realize we have one

party and need to act outside electoral politics. The folks in Wisconsin have figured that out, and soon the other states will follow. We need to be ready for that.

[ProSense]

9. Don't agree

Senator Sander's amendment to the December tax package was supported by 43 Democrats. TPM

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Before they passed the plan, Senators considered an amendment by Sen. Bernie Sanders (I-VT), who spoke out against the bill for nine straight hours last week, that would have replaced the payroll tax credit with an extension of the Make Work Pay Credit, imposed an estate tax of 45 percent on estates worth more than $3.5 million and provided a cost-of-living-adjustment of $250 to seniors, veterans and the disabled dependent on government benefits. It failed 57 to 43.

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More push needed, 15 Democrats voted against Sanders' amendment. Roll Call:

Baucus (D-MT)
Bayh (D-IN) gone
Bennet (D-CO)
Casey (D-PA)
Hagan (D-NC)
Kohl (D-WI)
Lieberman (ID-CT) retiring
Lincoln (D-AR) gone
Manchin (D-WV)
McCaskill (D-MO)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Udall (D-CO)
Webb (D-VA) (retiring)

Among those who voted for it, Bingaman, Conrad, Dodd, Dorgan, Feingold are gone or retiring.

Good time to elect better Democrats. A progressive movement is needed more now than ever.

[mmonk]

5. The president's budget certainly won't pass now, especially

since it couldn't pass under Democratic Party control. The battle for reason was lost in his first two years and especially in the last. We have to have a political party or force that will unify behind the measures Reich speaks of before we can win it.

[JHB]

10. As for how to get the republicans to acquiesce, they have to be made to sweat...

...force them to do the calculation of "go along with us or lose".

Unfortunately, that's going to involve going on the offensive and making them look like bad guys (even to people who don't already consider them so). Which means being partisan, or quietly supporting partisans so that the WH can play the "good cop" who can keep those rowdy radicals from wrecking the joint. And the higher taxes are not something the so-called "pro-business" community wants to hear, even within our own party.

So the follow-up question is how to get Congressional Dems and the WH to listen to that strategy.

[ProSense]

11. Completely agree.

You have Huckabee blowing dog whistles, Daniels, Pawlenty and every Republican jerk dominating the news.

The unions have finally put workers at the forefront, but a lot more on all fronts needs to be done. There needs to be a concerted effort to call out the assault on poor to middle-class Americans, the environment and Government. It needs to be done loudly when appropriate and subtly and constantly to allow the message to resonate.

All that's happening now are choppy, inconsitent and mostly obscure responses by people like Reich and a few others. Some of these miss the point, which is to drill home that Republicans and their allies are trying to destroy this country. That's not hyperbole when Rand Paul, Paul Ryan and the Kochs are working toward a single goal, destroying Government.