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.
The legislation is divided into three basic categories: the first is proactive federal spending an action meant to boost the flagging economy. It includes:
$300 billion for roads, bridges, energy efficiency systems and other infrastructure
$20 billion in school modernization funding
Boosting funding for agencies that regulate trade, to better enforce fair trade policies
Funding to states to hire teachers, public safety workers and other public employees.
Then, the bill deals with ensuring long-term stability for the middle class. These provisions include:
Increased child care subsidies for working parents
Ensuring that workers, particularly white-collar workers categorized as independent contractors, earn time-and-a-half overtime pay
Raising the minimum wage
Strengthening the National Labor Relations Act, making it easier for workers to join unions and increasing penalties on employers for blocking unionization.
To help pay for the increased spending, and with an eye on reversing widening income inequality, the bill has many dramatic tax proposals:
Raising the capital gains rate and closing the carried interest loophole
A Wall Street speculators tax, of three basis points on common financial securities trades
Ending tax breaks for companies that outsource jobs
This may read to you as a wish list for progressive economists and policy experts, and it is. Former labor secretary Robert Reich, who testified before Harkin’s Senate committee last year as it was crafting the plan, said that a bold response was needed beyond the half-measures being proposed by the mainstream Democratic Party.
“The middle class still doesn’t have the capacity to do its part in buying the goods and services that will boost the economy and keep the economy going. Without bold action the destruction of America’s middle class is going to continue,” Reich said on a conference call this morning. "We have not licked this problem. Even though I am enormously proud to have been a part of the Clinton administration, and I also think the Obama administration has tried to do what it can do, we need a broader approach.”
Harkin said this morning he realizes the votes for his bill don’t exist in the Senate right now, but that the discussion is skewed too far right. “I want to get this in. I want to makes sure that it’s part of our national dialogue and national conversation as we go through this campaign year,” he said.
There is broad overlap between the “Rebuild America Act” and the Congressional Progressive Caucus “Budget for All” in the House, and Harkin said he anticipates working with House progressives to push both budget plans.
Conservatives have been extremely successful in recent years at moving the center of their party rightward—and this is due in part to aggressive steps to influence candidates for federal office. I asked Harkin if he would employ a similar approach.
“I firmly believe that anyone running for election this year to the House or the Senate—if they take up this bill, if they take up the direction of this bill… I believe that will be a winning formula,” he said. “I think the American people are hungry, looking for some way out of this mess that we’re in and I think they’re saturated [with] these sort of quick-fix type things—that we can’t be bold, we can’t grow, we’ve got to, as the Ryan budget says, just keep shrinking and shrinking and shrinking.”