Clinton’s allies guide her toward moderate economic approach
WASHINGTON — Inside the Democratic Party, economic policy is often seen as a contest between President Barack Obama’s track record and the anti-Wall Street approach advocated by Massachusetts Sen. Elizabeth Warren.
As Hillary Rodham Clinton heads for an expected 2016 run for president, her allies are pointing her toward something in-between.
A group of Clinton advisers offered a detailed economic agenda last week that aims to help raise wages for millions of workers and close the gap between rich and poor. The policy road map was produced at the Center for American Progress, a Washington-based think tank stocked with veterans of the Bill Clinton and Obama administrations. It appeared to target those who are disenchanted with Obama and skeptical that Clinton effectively would police Wall Street and champion middle-class workers.
“While there are large forces, globalization, technology and more, that are creating large challenges for many workers, there is no excuse or intellectual basis for fatalism,” said Larry Summers, one of its authors and a former treasury secretary under President Bill Clinton who later worked for Obama.
The subject is clearly on Hillary Clinton’s mind. In her first tweet in more than a month, she posted this Friday: “Attacking financial reform is risky and wrong. Better for Congress to focus on jobs and wages for middle-class families.”
Campaigning for Democrats last fall, she often spoke of the need to return to an economic system of broadly shared prosperity.
That goal has eluded Obama, even though he is able to point to a rebounding economy, falling unemployment rates and lower gas prices. Obama, in Tuesday’s State of the Union, plans to propose raising the capital gains rate on the wealthy and eliminating a tax break on inheritances. The plan is a nonstarter with Republicans, but Obama will make the case for using the additional revenue for new tax credits and other benefits for the middle class.
Warren, in a speech this month to the AFL-CIO, said that despite stronger economic growth and a soaring stock market, “America’s middle class is in deep trouble.” Liberals say the problem of stagnant wages require urgent action.
“We need to be extremely aggressive to deal with income and wealth inequality,” said Vermont Sen. Bernie Sanders, an independent who may seek the Democratic presidential nomination.
Republicans such as Jeb Bush and Mitt Romney are beginning to articulate their own agenda for addressing income inequality, reflecting an expected argument that Obama’s policies have not helped millions of workers.
“Their liberal policies are good every four years for a campaign, but they don’t get the job done,” Romney said in a speech last week to the Republican National Committee.
Clinton’s template has been the 1990s, during her husband’s two terms, and Summers noted that many of the ideas in the report built upon the “Putting People First” agenda from Bill Clinton’s first presidential campaign.
It also cited some of the chief parts of Obama’s economic program, such as efforts to raise the federal minimum wage, spend more on roads, bridges and public works, offer paid leave for workers and help students pay for college.
But the report also offered other ideas with broad appeal in the party: tax credits for middle-class families, incentives for employees to partake in profit-sharing, attention to collective bargaining rights and tying the repayment of student loans to a graduate’s income earned over two decades or more.
Those responsible for the report have strong Clinton connections.
Along with Summers, the commission included the center’s president and CEO, Neera Tanden, a former Hillary Clinton policy adviser; former Michigan Gov. Jennifer Granholm, a leader of a political action committee set to back a Clinton candidacy; and Steven Rattner, who was chief adviser to Obama’s auto bailout task force and is a longtime Clinton donor.
Clinton, who returns to the speaking circuit in Canada this coming week, has said she would offer a “very specific agenda” if she runs for president.
Some progressives said that while the new report offered good ideas, it had deficiencies. Most notably, it does not advocate for the breakup of Wall Street banks, which Warren has sought, and does not push for a higher minimum wage beyond the $10.10 pushed by Obama.
Anna Galland, executive director of MoveOn.org, noted the role of lobbyists only had a passing reference in the findings.
“In some areas, the report represents a largely Washington establishment perspective, and isn’t as bold as folks outside the Beltway are probably ready for,” Galland said.
Jared Bernstein, a former economic adviser to Vice President Joe Biden, said much of the report offered ideas that could unite broad parts of the Democratic coalition. He said it built upon a growing understanding in the party, in the aftermath of the November elections, that simple economic growth is not enough to lift the fortunes of middle-class workers.
“I don’t think the 2014 midterms were some sort of fluke. If you don’t give people a reason to get up and go vote for you, I’d expect them to sit down and stay home or vote for somebody else,” he said. “So you can’t assume based on demographics or race or income class that the electorate is going to support you. … You have to do precisely the kind of policy work that this group is offering us.”