The stalemate in the 2000 election is the latest evidence that the New Democrat “Third Way” vision for American politics is fundamentally flawed. It doesn’t galvanize voters, it doesn’t effectively unite the Democratic Party and it’s easily co-opted by the Republicans (think George W. Bush’s “compassionate conservatism”). Consider these important election results.

§ Gore won only 48 percent of the popular vote, giving the Democrats an average of just 47 percent over the past three elections.

§ Democrats failed to retake the House once again. The Republicans now control it by nine seats, while before the 1992 election the Democrats controlled the House by 100 seats. At that point, the Democrats also controlled the Senate by fourteen seats, while the Senate is now evenly split.

§ Outside their base (blacks, Hispanics, union households), the Democrats continue to lose badly among mid- to downscale voters. For example, Gore lost white voters with incomes under $75,000 by thirteen points and non-college-educated whites by seventeen points.

§ The Democrats have had some success with certain upscale voters–for example, Gore carried white women with a postgraduate education by twenty-two points. But that’s no more than 5 percent of voters.

These results are striking because the New Democrats’ original political plan was to gain a clear electoral majority by appealing to Reagan Democrats–white working-class voters who had soured on the Democratic Party. Now they lionize soccer moms, wired workers and other upscale voters and seem to ignore the less affluent voters they expressed such interest in in the 1980s. This shift is well documented in their own writings. For example, in 1989 the Democratic Leadership Council published the seminal New Democrat study, The Politics of Evasion. This treatise was replete with respectful references to the “white working class,” the “lower middle class” and “middle income voters.” In contrast, the DLC’s 1998 document, Blueprint: The Next Politics, is rife with laudatory references to a rising, affluent “learning class” and an expanding “upper middle class.” This mantra about affluent learning-class voters was repeated by DLC chief Al From at a January 24 forum in Washington that sparked clashes between Democratic centrists and progressives over the direction the party should take. Considering that the income distribution, according to the Census Bureau, has improved only modestly since The Politics of Evasion came out, it’s hard not to read a fair amount of significance into this shift in emphasis.

There’s also been a big shift in the kinds of policies favored by New Democrats. Ideas endorsed in the early 1990s–reflecting their heavy involvement in Clinton’s successful presidential candidacy–included promoting economic security, providing universal health coverage, increasing public investment and fighting inequality. Current DLC documents call for privatizing Social Security, introducing Medicare vouchers, eliminating the national debt (greatly reducing funds available for public investment) and unleashing a new economy that has, so far, shown itself more capable of enriching a new crop of Internet billionaires than of substantially reducing inequality.

In adopting this stance, New Democrats seem oddly similar to New Politics activists of the early 1970s, who were likewise unconcerned with white working-class voters and solicitous toward liberal elements of the upper middle class. The big difference is that this segment of the upper middle class is no longer economically liberal and appears mostly interested in fending off socially intolerant conservatism. For example, data from a postelection poll conducted by Greenberg Quinlan Research for the Campaign for America’s Future indicate that affluent white liberals in the 2000 election were motivated more by the desire to safeguard a woman’s right to choose and to receive middle-class tax cuts than by investing in education and protecting Social Security. In 1989 New Democrats expressed concerns about the “shrinking influence of lower-middle-class Democrats and the concomitant rise of higher socioeconomic-status Democrats who hold liberal views on social issues” but shunned issues of economic inequality. Over the past decade, those New Democrats have not only failed to find solutions to the problems posed by the party’s wealth gap, they have, ironically, adopted many positions they earlier lamented.

Clearly, it’s time to rethink the Third Way. While many of President Clinton’s political accommodations were probably necessary, he is fundamentally a transitional figure. It is time for a New Liberal philosophy to supersede not only Old Liberal approaches but those of New Democrats as well. This New Liberal approach would share the orthodox Third Way premise–that traditional liberal and conservative approaches are wanting–but would offer a dramatically different program aimed at seriously addressing fundamental problems of social justice and economic inequality. Such is the payoff, after all, that the Third Way movement was meant to make possible.

Both of us agree with some of the New Democrats’ original critique of liberalism. In the early 1990s Teixeira worked for the Progressive Policy Institute and Kahlenberg worked for Virginia Senator Chuck Robb, one of the original New Democrats. Third Way advocates not only helped restore the credibility of progressives on crime and national defense, they have put progressives in better sync with the values of average Americans through their emphasis on work over welfare and equality of opportunity over equality of result.

This had the salutary effect of defanging the conservative critique of “amoral, big-government liberalism.” But none of this justifies New Democrats’ support for a needlessly draconian welfare reform bill that failed to guarantee jobs or for an increasingly repressive and ineffective “drug war.” Moreover, on central economic issues, Third Way proponents have always tended to ally themselves closely with powerful business interests and have increasingly downplayed the traditional progressive concern for the underdog (or even the “middledog”). We take issue with New Democrats’ contention that “outdated appeals to class grievance and attacks on corporate perfidy only alienate new constituencies and ring increasingly hollow to the modern work force.” And we believe that the emphasis on fiscal responsibility, while a reasonable part of the progressive program, has been taken to an extreme.

Indeed, today progressives are not united behind the need for major new initiatives to promote greater equality. Faced with a surplus unimagined just a few years ago, many have embraced policies heavy on debt reduction and light on investment in enterprises like education. A New Liberal approach would be quite different.

First, we believe that the New Liberalism, unlike New Democrats, would recognize that “you get what you pay for.” There’s just no way the common problems of middle- to low-income voters can be adequately addressed in this country when such an overwhelming priority is put on paying down the national debt.

Take the issue of education, generally the number-one concern of voters in the country today. Families want to be assured that their children receive a quality education, even as they worry about the financial and time pressures involved in juggling children, school and work. New Liberals would therefore advocate a substantial expansion of federal investment in education, including: (1) a major teacher pay increase, to address the need to attract talented men and women; (2) the support necessary to open schools early, keep them open into the evening and make them available during the summer; (3) universal access to preschool, including fully funding Head Start; and (4) a generous income-contingent college loan program, where students’ repayments are pegged to their actual earnings after they leave school, to make college education a reasonable option for many who now see the associated debt burden as too high. Combined with needed educational reforms like public-school choice, outlined below, these major investment initiatives would go a long way toward both improving access to good education and easing pressure on working parents.

Second, we believe the New Liberalism would be strongly committed to growing the new economy, but also to rectifying inequality and equipping everyone to prosper in this rapidly changing environment. Fast growth is a necessary, but not sufficient, condition for the kind of improvements working families need. For example, New Liberals would be committed to expanding world trade but also to underpinning that trade with reasonable labor and environmental standards. And New Liberals would recognize the need to temper the process of globalization with strong provisions to stabilize the world financial system and promote balanced development in poorer countries. At home, New Liberals would support substantial increases in the minimum wage to soften the sharpest edges of inequality. And major campaign finance reform is an essential ingredient of insuring that politicians spend less time on cutting estate taxes and more on the needs of average voters.

Third, we believe the New Liberalism would emphasize universal programs that disproportionately benefit those of middle to low income and education, across all races, rather than race-based programs. We take our cue from Robert Kennedy’s belief that “poverty is closer to the root of the problem than color,” and that “we have to convince [blacks] and poor whites that they have common interests.”

Such a universalist stance obviously includes preserving Medicare and Social Security, as the Democrats emphasized in the 2000 campaign. But, while defending social insurance must remain a bedrock commitment of Democrats and progressives, it is difficult to argue that it constitutes a convincing approach to the unfolding problems of the new economy. For many working families, the Democratic program may have failed to excite for precisely this reason. New Liberals advocate a more forward-looking approach that focuses on the new economy in critical areas like education, training, childcare, work-family stress, scientific research and, of course, universal health and pension coverage.

Taking universalism seriously, New Liberals would also offer fresh approaches in contentious areas that have fractured the progressive coalition, sundering blacks from whites and organized from unorganized workers. For example, New Liberals would seek to apply civil rights principles to poor and working-class people of all races in at least three areas: affirmative action, school desegregation and union organizing.

First, affirmative action should be redefined to provide a leg up to economically disadvantaged people of all races. In the legal and political warfare over affirmative action in university admissions and elsewhere, Old Liberals emphasize ends (we don’t want universities and the professional work force to be all white), while New Democrats and conservatives emphasize means (we don’t want skin color to determine who gets ahead in society). New Liberals seek to reconcile fair means and desirable ends by providing a leg up based on disadvantage itself, looking at economic status directly rather than race as a crude proxy. When conservative critics of affirmative action ask why it is fair for Vernon Jordan’s kids to get a preference over the daughter of a white welfare mother, they unwittingly underline a profoundly progressive message: Class matters. Rather than awarding points on the basis of race, or simply judging candidates on test scores and grades, class-based affirmative action seeks to evaluate a candidate’s record in light of obstacles overcome, as a better measure of true merit and potential.

Because class-based affirmative action is fundamentally fair, polls find that it is much more popular than the race-based system. For example, in a December 1997 New York Times/CBS poll Americans rejected racial preferences 52-35 percent but favored replacing such policies with preferences for the poor 53-37 percent. Moreover, where race-based preferences divide the interests of working-class whites and blacks in an unmistakable way, class-based preferences unite these groups in a way that will immeasurably enhance the fight for a fairer society in other areas.

Second, school integration should be redefined with a focus on economic status, so that every child in America has the right to choose to attend a middle-class public school. Today the courts have eviscerated the promise of Brown v. Board of Education, and even voluntary racial integration plans are being struck down. Old Liberals and some New Democrats have been reduced to good but small education ideas–school uniforms, reduced class size, etc.–none of which address the fountainhead of school inequality: the inevitable difference in quality between poor and wealthy schools. Meanwhile, the right and some other New Democrats have pushed a scheme for privatizing education that most careful observers believe will further segregate the schools, by class and race, since the “choice” that conservatives talk about ultimately rests with private schools rather than with students.

It’s time for a big idea in education, in which all American children are given the right to attend a public school in which the majority of students come from middle-class households. Ironically, conservative voucher advocates, by emphasizing the basic unfairness of assigning poor kids to bad local schools, have implicitly recognized that neighborhood schools can be a source of great unfairness for poor people. Instead of giving poor kids vouchers to unaccountable private schools, poor children should, in this middle-class country, be given the right to choose to attend middle-class public schools. Marrying two popular American ideas, choice and public education, economic school integration can help make good on our longstanding promise that public education should be an engine for social mobility.

How can economic school integration be achieved? Busing is a nonstarter. Far better is a mechanism known as “controlled choice,” devised by Charles Willie of Harvard and Michael Alves of Brown. Parents in a given community are polled to find out what sort of school themes and pedagogical approaches they find attractive for their children (for example, a computer science theme in one school or a Montessori approach in another). All schools in the area are magnetized to reflect the community’s interests, and families are given an opportunity to rank preferences among the various public school offerings. Officials then honor choices with an eye to promoting integration.

In places like Cambridge, Massachusetts, and Montclair, New Jersey, controlled choice has long been used to balance racial populations, but the structure can easily be used to balance schools by income as well, using eligibility for subsidized school lunches as a measure. This new emphasis on students’ economic status–favored by communities like La Crosse, Wisconsin, Manchester, Connecticut, and Wake County (Raleigh), North Carolina–is at the cutting edge of school integration. It offers a way to address the separation of poor and middle-class children and will indirectly promote racial integration in a manner that’s perfectly legal. Economic integration is easiest to implement within school district lines, but city-suburban transfer programs in Hartford, Boston, St. Louis and elsewhere provide models for interdistrict integration.

Third, the right to organize and join a labor union should be reconceptualized as a civil right, so that employers are genuinely punished if they try to fire someone for organizing activity. One of the major explanations for America’s weak labor movement is the relative ease with which employers may fire employees who are engaged in union organizing. Under existing labor law, it is technically illegal to fire employees for trying to organize, but the sanctions are mild (reinstatement and back pay, usually three to four years down the line). Many employers determine that it is considerably less expensive to pay sanctions for wrongfully terminating employees than to permit the organization of a labor union.

Old Liberals have put little emphasis on discrimination against workers engaged in union organizing, focusing primarily on race and gender discrimination. New Democrats and conservatives have often been at war with labor. The New Liberal approach would strengthen the protections against termination by transferring jurisdiction over such issues from labor law to employment discrimination law. Specifically, Congress could amend the termination provisions of Title VII of the 1964 Civil Rights Act (which today in practice protect women, people of color, the elderly and the disabled) to extend protection to workers trying to form a union. Title VII remedies are considerably stronger than protections contained in labor law and now include the possibility of punitive as well as compensatory damages.

There is also an important political advantage to thinking about union organizing as a civil right. Labor unions are not particularly popular, and as long as the issue is framed as “labor law reform” it is unlikely to move people. But if the issue is reframed in terms of civil rights–and we get beyond the question of whether people are for labor unions or against–most Americans will support the notion that an employee shouldn’t be fired for a reason completely unrelated to job performance.

By taking issues of class seriously, these New Liberal ideas fill a gap left by Old Liberals, who emphasize race and gender inequality, and by conservatives (including some New Democrats), who try to downplay issues of inequality of any kind. At the same time, these ideas address economic inequality in a very American, market-oriented way that accepts competitive labor markets and meritocracy–in contrast to many traditional leftists–but tries, at long last, to make them truly fair and just.

The 2000 campaign suggests such an approach can work. When Al Gore briefly experimented with economic populism in his Democratic convention speech, he eliminated George W. Bush’s double-digit advantage and surged into the lead. Had Gore been bolder on issues like education, as New Liberals advocate, he could have prevented Bush from climbing back into the race by effectively blurring issue differences and shifting the political conversation to concerns such as trust, likability and the moral failings of the Clinton Administration. Indeed, if Gore had had a stronger advantage on the education issue, he’d probably be President today.

American politics is ready for something exciting. The Third Way, as it is narrowly defined by the New Democrats, doesn’t fit the bill. Worse, it can’t possibly develop a strong progressive majority, since it consistently ignores or downplays the interests of the working class and moderate income voters on whom such a majority would depend. A coalition of minorities, unions and socially liberal, economically conservative upper-middle-class voters just won’t cut it–either as politics or in terms of making this country live up to its potential.

A New Liberal approach, one that marries the New Democrats’ effort to honor American values on social issues with the Old Liberal commitment to economic equality and justice, would be a more impassioned and productive way to approach today’s problems–and more likely to build a majority coalition for economic justice over the long haul. America needs “big ideas” like the ones we’ve described, not a Third Way whose only real virtue is what it isn’t. We can do better–much better–than that.