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“A Better Deal”? Dissecting the Democrats’ “Populist” Turn in Rhetoric and Reality

Photo by 7beachbum | CC BY 2.0

In response to their trouncing in the November 2016 presidential and congressional elections, Democrats have unveiled their “A Better Deal: Better Jobs, Better Wages, Better Future” economic agenda, in preparation for the 2018 midterm and 2020 elections. One thing that seems clear is that the Democrats have finally figured out that it’s not enough simply to be “against Trump” if they want to gain seats in the House and Senate in the next two elections, and eventually recapture the White House. While the platform contains numerous items that would benefit the masses of Americans, it doesn’t even reach a Bernie Sanders level of liberalism, and it is a far cry from the kind of progressive populist policies introduced in FDR’s New Deal and Johnson’s Great Society/War on Poverty.

The “Better Deal” proposal was reportedly a result of establishment Democrats’ efforts to reach out to Sanders supporters within the party. When drafting the proposal, Democratic Senate and House Minority Leaders Chuck Schumer and Nancy Pelosi consulted University of Missouri economist Stephanie Kelton, who stands firmly within the Sanders wing of the party. Kelton reflects positively on the collaboration: “I think it was significant that they reached out to me knowing that I had been an economic advisor to the Sanders campaign…I definitely think they understand that in order for the party to unify around a broad, ambitious, economic platform, they need to include everyone.”

The unpopularity of the Democrats is not exactly a state secret. An April Washington Post-ABC News poll found that two-thirds of the public believed the Democrats are “out of touch” with the needs and concerns of the average American. This is even higher than the ratings for the Republican Party, with 62 percent saying that both Donald Trump and the GOP are out of touch with ordinary people. More recently, a June Quinnipiac University poll found that Democrats had a meager 29 percent approval rating, compared to Trump’s approval rating, which has hovered in recent months in the mid-to-high 30s.

The “Better Deal” agenda resulted from months of discussions between Schumer and Pelosi, in addition to other prominent Democratic officials. That these two are the primary architects of the proposal explains a lot in terms of why the policies offered are so milquetoast in their ideological orientation, and why more progressive policies were avoided. Schumer and Pelosi are old guard, neoliberal Democrats, and I imagine it was difficult to convince them to support even a nominal move to “the left,” as seen in the “Better Deal.”

For those unfamiliar with the agenda, the Democrats are proposing a number of “populist” policy changes in hopes of attracting Bernie voters back to the polls. These include: an increase of the minimum wage to $15 an hour; new employer tax credits meant to encourage new hiring and job training; a $1 trillion infrastructure redevelopment plan; regulations to lower prescription drug costs; and a plan to break up corporate monopolies. Many of these things are long overdue, including the infrastructure spending and prescription drug regulations. For example, public infrastructure funds totaling in the hundreds of billion to trillion dollar range have long been the norm in U.S. spending bills, so this proposal is really nothing out of the ordinary. Such funds must be allocated on a regular basis to keep the country running, and continual funding for these projects is hardly a radical idea in a country that has long lagged far behind other industrial nations in infrastructure spending.

Furthermore, regulations on drug prices should have been introduced back in 2003, when the Bush administration created a prescription drug plan to be implemented through the Medicare program. It was well documented at the time that the program, without serious price controls, would be a boon to pharmaceutical corporations, and gouge American consumers. This fact was hidden from Congress, however, by health care industry allies working in the Medicare program such as Thomas Scully and Richard Foster, who knowingly provided low-ball estimates for how much the prescription drug plan would cost. Shortly after, Scully went to work for Alston & Bird as a lobbyist for the drug companies, in one of the most blatant recent examples of regulatory capture of government by a private industry.

The national minimum wage proposal is also long past due. The minimum wage has stagnated at $7.25 an hour since 2009, and lost 14 percent of its value, after taking into account inflationary pressures. A $15 dollar an hour minimum wage would be significantly higher than the previous high value of the minimum wage, which reached $11.01 in 1969, as measured in 2017, inflation-adjusted dollars. Still, any sober analyst of this proposal must conclude that even if Democrats take back the House and Senate in 2018 (a very tall order), the actual wage raise will be far less than the one proposed here. Without a super-majority in the Senate, Republicans will filibuster the $15 an hour wage proposal, rightly viewing it as a threat to business profits. Democrats could avoid the inevitable attrition of the minimum wage’s value over time by proposing to raise the minimum wage and index it to inflation, which would represent a serious victory for working people. But the Democrats have consciously avoided this proposal in their “Better Deal.”

Aside from the refusal to protect working wages from inflation, much of any increase to the minimum wage is likely to be eaten away by rising health care costs, which have historically risen at a far higher rate than the consumer price index in recent years. Which brings us to the elephant in the living room regarding the Democrats’ proposal: the complete absence of any support for universal health care. Coupled with the skyrocketing cost of college, mounting health care costs have been the biggest drain on consumers’ wallets in modern times. Democrats recognize that large increases in prescription drug costs are a problem – with increases being between 3.4 to 6 times the inflation rate per year during the early-to-mid 2010s. Such costs grew by 12 percent in 2017 alone, a staggering increase for only one year. If runaway drug prices necessitate regulation, why don’t increases in health insurance and other health-related costs necessitate government action?

Without at the very least a “public option” to provide for government health insurance for the uninsured, or ideally a universal health care system, Americans will continue to be gouged by spiking health care costs. Forbes magazine reports that the average cost of health care for a family of four on a PPO plan in 2016 reached $25,826, an increase of 111 percent since 2005. After adjusting for inflation, this represents a 67 percent total increase in the cost of care, or a 6 percent increase in cost post-inflation per year. According to U.S. Census Bureau data, the median household income was $46,242 in 2005, compared to $56,516 in 2016. But after adjusting for inflation, this actually represents a 3 percent decrease in household income, suggesting that health care cost increases are completely unsustainable compared to American income levels.

Finally, there is the Democrats’ anti-monopoly proposal. In his editorial in the New York Times, Schumer writes: “Right now our antitrust laws are designed to allow huge corporations to merge, padding the pockets of investors but sending costs skyrocketing for everything from cable bills and airline tickets to food and health care. We are going to fight to allow regulators to break up big companies if they’re hurting consumers and to make it harder for companies to merge if it reduces competition.” But it’s difficult to know exactly what this promise means without specific details. If the Democrats want to go after Telecommunications firms like AT&T for its proposed $85 billion takeover of Time Warner, based on the notion that the company and other internet/cable providers represent monopoly interests that gouge their customers, then the Democrats will have to lay out specific proposals for how to dismantling the local monopolies that these companies hold. Until then, rhetoric about trust-busting amounts to very little.

Talk of breaking up monopolies is relevant in that it raises the question about what, if anything, the Democratic Party is willing to do to reintroduce New Deal-era regulations on the banking industry. Will Pelosi and Schumer support the reintroduction of the Glass Steagall act, which created ownership regulations separating traditional commercial banks from riskier speculative banks and investment firms? If not, there is little reason to think the Democrats are seriously committed to a form of anti-monopoly politics that will have a positive impact on the American economy.

Many progressives will be left feeling that the “Better Deal” comes up far short of the progressive proposals Democrats should be supporting. Schumer has intentionally set the bar low here, which is apparent even in the name of his agenda, “A Better Deal.” It’s difficult to get much more repugnant or vile than Trump and the Republican Party’s crony capitalist agenda, which includes anti-labor judicial appointments and policies, business deregulation, even more tax cuts for the wealthy, a devastating environmental policy that thumbs its nose at climate change, and reactionary efforts to privatize public education, among other harmful policies. Calling Schumer and Pelosi’s agenda “better” in comparison to Trump isn’t saying very much in terms of its prospects for helping middle class, working class, and poor Americans.

In some ways, the “Better Deal” comes up short of even Hillary Clinton’s admittedly weak liberal policies. At least Clinton offered to revise the tax code and increase rates on wealthy Americans to provide free tuition to college students. Schumer and Pelosi’s plan doesn’t even go that far. With the failure to address the broken health care and education systems, it’s difficult to avoid the conclusion that the “Better Deal” plan is more than a half-hearted, short-term effort at winning votes in 2018. What we sorely need is a truly progressive political party that embraces a long-term commitment to raising the living standards of the American masses. Unfortunately, the Clinton’s, Schumer’s, and Pelosi’s of the Democratic Party are simply not up to the challenge.

More than a hundred Democrats in the House, and prominent Senate Democrats such as Bernie Sanders, Elizabeth Warren, Kristen Gillibrand, and Kamala Harris all claim to support a single-payer system. Now is the time for these Democrats to put their money where their mouth is. Health care reform has always been a thankless task due to the deep pockets of the health care industry and its commitment to propagandizing the public against progressive health care reforms. But the Democrats will never develop a substantive, long-term support base until they get runaway health care costs under control and provide health care to all Americans as a public good.
If the Democrats refuse to endorse universal health care and other progressive policies, the party will only continue its decline into irrelevance and eventual oblivion. The U.S. needs a genuine left party, and if the Democrats aren’t up to the task, they’ll be doing us all a favor by disappearing as an organized political entity.

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Anthony DiMaggio is Associate Professor of Political Science at Lehigh University. He earned his PhD from the University of Illinois, Chicago, and is the author of 9 books, including most recently: Political Power in America (SUNY Press, 2019) and Rebellion in America (Routledge, 2020). He can be reached at: anthonydimaggio612@gmail.com

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