“It’s time for percolate-up economics for the middle class.”
—Senator Tom Harkin defending the “Rebuild America Act“
From philosopher John Rawls I learned the “difference principle,” which essentially states that social justice entails creating the kind of society in which the worst among us are as well off as possible. The key to understanding this concept of social justice is to note the phrase, “as well off as possible,” and not mistake it for, “as well off as everyone else.”
My personal application of this idea is that certain social inequalities can be tolerated so long as we have striven to eliminate them in the context of keeping the engine of capitalism running. This implies that restrictions on capitalism are necessary, and that there is a need for redistributive polices, in order to ensure wealth doesn’t become too highly concentrated in the hands of a few.
As a liberal, I’m not afraid of stating that notion openly and defending it not only on the grounds of justice or fairness, but on the grounds that a society whose abundance is not shared by most of its citizens cannot long endure as a stable entity.
Having said that, here is an excerpt from The Nation:
Senator Tom Harkin announced today a broad economic plan that he will introduce shortly in the Senate—one well to the left of the current White House proposal and aimed directly at reviving the middle class.
Harkin’s legislation, which he dubs the “Rebuild America Act,” touches on virtually every area of American economic policy: it revamps the tax code, initiates a wide array of public spending meant to goose the economy, pushes for fair trade laws, and retools laws and regulations that affect middle-class families.
Here are some proposals in the bill, which is divided into “three basic categories”:
Economy and Job Boosters:
- $300 billion (over ten years) for roads, bridges, sewer-water systems, levees and rural infrastructure
- $20 billion (over ten years) in school modernization funding (From Harkin’s summary: “Grants are distributed to states based on poverty and population and States must describe how they will consider the impact of potential projects on job creation and give priority to eligible entities that use green practices and serve the largest percentages of low-income populations, among other things.”)
- Boosts funding for agencies that regulate trade in order to better enforce fair trade policies
- Helps states fund the hiring of teachers, public safety workers and other public employees
- Provides a formula for matching grants to the states for “the modernization, renovation, and repair of early childhood education and care facilities, k-12 public schools, and community colleges
- Establishes a program to help local communities “in efforts to undertake comprehensive energy systems renovations strategies” for the 21st century which will “enhance energy security and lessen environmental impacts”
- Provides competitive grants for ensuring that Americans “obtain the skills and credentials needed to enter into and advance in high-quality jobs”
- Provides loan guarantees so small manufacturers with work orders can get loans to expand
Middle Class Stabilizers:
- Increases child care subsidies for working parents and grants to the states to “encourage the development of high quality child care programs”
- Ensures that workers, particularly white-collar workers categorized as independent contractors, earn time-and-a-half overtime pay
- Raises the minimum wage to $9.80 over two and a half years and then indexes it to inflation; raises the minimum wage for tipped workers “to 70% of the federal minimum wage”
- Requires employers to offer workers paid sick days
- Strengthens the National Labor Relations Act, making it easier for workers to join unions and increasing penalties on employers for blocking unionization.
- Improves benefits “for current and future Social Security beneficiaries” by changing the method of calculating the benefits, which “when fully phased in” would increase benefits by $800 per year; also the law bases future increases on the Consumer Price Index for the Elderly rather than the Consumer Price Index for all Urban Wage Earners
- Phases out the Social Security tax cap on wages
- Raises the capital gains rate (to 28% for higher-bracket earners) and closes the carried interest loophole
- Institutes the “Buffett Rule,” which ensures that Americans “with annual income over $1 million, pay no less than a 30% effective tax rate”
- Creates a Wall Street “speculators tax” of three basis points on common financial securities trades
- Acquires “$65 billion over 10 years from large financial institutions…that received emergency financial assistance” through TARP
- Ends tax breaks for companies that “ship jobs overseas”
- Protects workers’ pension funds by strengthening the Pension Benefit Guaranty Corporation and by adding protections for workers who pensions are threatened by bankruptcy
As The Nation’s George Zornick points out, Harkin’s legislation overlaps much of the recently announced “Budget for All” from the House’s Congressional Progressive Caucus.
Now, everyone knows that the chances of getting this or similar legislation passed is exactly zero. But that’s not the point. Too often Democrats start with a compromise and give more and more until we are essentially debating Republican proposals (see: the Affordable Care Act).
It is time we start the conversation on our own terms.