When President Obama was first elected, he took his Economic Recovery and Reinvestment Act to the Congress and the country. It included $30 billion for infrastructure improvements, including $26 billion for 12,000 bridge, highway, and road projects, $1.3 billion for aviation improvements, and $18 billion for traditional transit and high-speed rail under the clean energy projects category—timed to be spent quickly, over about two years. The voters at that point understood the context and timing. At the time, two-thirds of the public thought “increased spending on infrastructure such as highways and public buildings” would be helpful in fixing the country’s economic problems.18
But when he later took his jobs bill to the Congress with additional infrastructure spending to give a short-term stimulus to the economy, barely half the country supported it. The president described it as “a jolt to an economy that has stalled” and said that it “answers the urgent need to create jobs right away,” and the public questioned the efficacy of such short-term policies and short-term jobs.19
You win the public for infrastructure when voters see independence from the political process, long-term plans, and a larger economic or national purpose. In the context of highways and bridges, there is almost 60 percent support for public-private partnerships to fund new infrastructure: “allowing private companies—with government oversight—to fund, build, and maintain a roadway for a specific term.” The same is true for a national infrastructure bank: “an independent, nonpartisan entity of the government tasked with evaluating and choosing transportation infrastructure projects based on merit and financing those projects with public and private funding.”20
The public rallies to support infrastructure investment on a large scale when it is part of a plan and is meant to address a big national goal. Two-thirds agree with the following statement, 38 percent strongly:
Our principal economic challenge is not the deficit but our hesitation to strongly invest in our future economic capacity. Trillions of dollars of capital is idle and millions are unemployed, and that’s wrong. We need to put this money and people back to work right now rebuilding our nation’s energy, transportation, and water systems. This is the best way to grow the economy and reduce our debt burden.21
Three-quarters of voters say they feel more positive about a leader who commits to addressing our “massive public investment deficit.”
We have a budget deficit, but the fact is we also have a massive public investment deficit—in roads, sewers, schools, trains, renewable energy, and other basic parts of our communities. To be competitive, we need to rebuild the infrastructure that is vital to our economy. This will create jobs, help business compete, improve our communities, and generate revenues that can help pay down the budget deficit.22
The public is looking for leaders who will defy the corruption and short-termism and act to rebuild and modernize the country for the long term. This is a moment for leaders to catch up with the ordinary voter.
6. Tax the richest so they pay their fair share
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FAIR TAXATION: Raise taxes on those with the highest incomes and close corporate tax loopholes and special-interest subsidies so they pay their fair share of taxes.
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A resounding two-thirds of presidential-year voters say we should raise taxes on the top earners and close their tax loopholes and subsidies simply so “they pay their fair share.” A large bloc of 42 percent support that strongly—including 50 percent of the rising American electorate and 58 percent of unmarried women. Independents, too, think it is time for them to pay: 62 percent support it, 40 percent strongly. And among white non-college-educated voters, who gave Obama only about 36 percent of their votes, 65 percent say the time has come for the rich.23
The American people strongly believe that the country should be raising taxes on those with the highest incomes, closing tax loopholes, and ending special-interest subsidies so the richest pay their fair share of taxes. It is at the top of the list when it comes to addressing the challenges in the new economy. The voters believe the tax system is a product of a corrupted political system that shapes everyone’s economic fortunes.
Liberated in his last two years in office, President Obama presented a budget for 2016 that included raising taxes to pay for infrastructure projects, two years of free community college, and tax credits for students and parents of children and dual-income households. The Republican leaders of Congress dismissed it immediately as class warfare, and in Senate majority leader McConnell’s words, “another top-down, backward-looking document.”24
Democratic leaders this time had already advanced their own tax reform initiatives, which included a financial transaction tax and limits on tax breaks for the top 1 percent of earners—and they applauded the president’s turn to middle-class economics. Perhaps Democrats will be less timid in putting such tax increases front and center.25
The fact is that starting with President Bill Clinton every Democratic nominee has advocated raising taxes on the rich and won. Clinton came into office after the Reagan tax cuts that heavily cut top-end rates and acted like a starting gun for CEOs to begin taking the lion’s share of the economic gains. The cut in tax rates and the inheritance tax restructured the incentives for corporate behavior, and voters watched skeptically.
It is virtually a rule that Democratic candidates run for president on raising taxes on the wealthy because tax policy, to be frank, is effective: when Republicans cut taxes, it helps the top and disadvantages the bottom; when Democrats raise taxes and close loopholes, it works, too—and that is what Democrats have done.
In his economic plan, Putting People First, Bill Clinton proposed raising taxes on families earning more than $200,000, closing corporate tax loopholes, and preventing companies from deducting CEO salaries of more than $1 million. The plan specifically proposed expanding key programs targeted at the lower- and middle-income people—community development block grants to rebuild urban infrastructure, a network of community development banks to give loans to low-income entrepreneurs and homeowners, funding for continuing education and job training programs, and expanding the earned income tax credit. Importantly, the plan would pay for these programs by raising tax rates for the wealthiest individuals and corporations. Clinton proposed eliminating tax breaks for excessive CEO compensation, multinationals that abused offshore tax havens, and drug companies that raised prices faster than the rate of income growth.26
Bill Clinton ran on raising taxes on the wealthy and promoted it with powerful rhetoric that left you thinking, “Finally, the average guy is going to get a break.” On the campaign trail, he put a lot of heat and rhetorical brilliance behind his plans: “I have news for the forces of greed and the defenders of the status quo—your time has come, and gone. It’s time for change in America.” He reminded people that he “was raised to believe that the American Dream was built on rewarding hard work,” but “for too long, those who play by the rules and keep the faith have gotten the shaft.” The government doesn’t get it because it has been “hijacked by privileged private interests” and the administration in Washington is animated by an economic philosophy that says, “you make the economy grow by putting more and more wealth into the hands of fewer and fewer people at the top.”27
In case you missed it, the Clinton campaign’s advertising in the last two months of 1992 made the case. “Only the rich are doing better because for twelve years we’ve been dominated by selfishness and greed and a concern for the short run.” So “We’re going to ask the rich to pay their fair share so the rest of America can finally get a break.”28
Barack Obama ran for president famously proposing to let President Bush’s tax cuts expire for those earning over $250,000 and pledging no tax increases for those earning less than that. Our surveys at the time showed that posture to be exceedingly popular.
Obama of course won that election in 2008, but you may not have noticed that he won an even bigger win on taxes. Note this: Obama won the tax issu
e by twice the margin that he won in the actual election. On Election Day, 53 percent of voters thought Obama would do a better job on taxes—13 points more than the 40 percent who preferred John McCain’s approach. The tax issue helped him in the election, as it did for President Clinton before him.29
The 2008 election provides even clearer proof on the issue. Obama used the inelegant phrase “spread the wealth around” in an impromptu exchange with Joe Wurzelbacher, who became known as “Joe the Plumber.” I’m sure his campaign advisers groaned, as this was not his organizing theme, but John McCain would make sure he owned it in the next two months. McCain raised Joe the Plumber nine times in the third presidential debate, took Joe Wurzelbacher to his campaign rallies, and elevated him in the campaign’s advertising—until he was the total topic of the campaign’s final paid advertising.30
This attack was the closing argument of the McCain campaign. They put $5.7 million behind their “Joe the Plumber” ad, airing it 12,750 times. It began with the Obama exchange. “Spread the wealth?” asks the announcer, followed by a series of individuals on camera, “I’m supposed to work harder just to pay more taxes. Obama wants my sweat to pay for his trillion dollars in new spending.” The announcer brings the ad and the campaign to a close: “Barack Obama: higher taxes, more spending, not ready.”31
The Joe the Plumber debate reminds us how misplaced our admiration for John McCain was. For all that effort, McCain lost the tax issue and the election.
The American people come to the tax debate with a strong set of values and their own common sense. For them, there is no new economic policy that does not address the tax code in a fundamental way.
The embrace of higher taxes for the richest so they pay their fair share when framed under Clinton’s historic legacy strikes many Americans as an “inspired” idea that would lead them to support a candidate who proposed it.
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Go back to the tax rates under Bill Clinton so those earning more than $250,000 and CEOs pay a new higher 40 percent tax rate so those who have done so well pay their fair share of taxes.
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A striking 50 percent of Americans in the most contested House districts in 2014 described that as an “inspired” idea that would lead them to consider a candidate, while another 22 percent supported going back to Clinton rates even though it was not a factor in their vote.32
So the public is ready for a new tax regime.
In truth, President Obama consistently enacted tax and economic policies that favored working people and the poor. He got Congress to lower Social Security payroll taxes for two years and won an expansion of the child tax credit and the earned income tax credit. He won expansion of Medicaid and new subsidies to help working people purchase health insurance. And he also got Congress to raise taxes on top earners and investment income to pay for the Affordable Care Act and to repeal the Bush tax cuts for those earning more than $450,000. As Paul Krugman wrote, “While America remains an incredibly unequal society, and we haven’t seen anything like the New Deal’s efforts to narrow income gaps, Obama has done more to limit inequality than he gets credit for.”33
While the public is a bit uneducated about Barack Obama’s tax policies, it is totally clear-minded about the administration’s posture toward the big corporations and economic sectors that sank the American and global economies. The public thinks he has worked hand in glove with the big banks—to rescue them and promote their interests, even as they did almost nothing for those with underwater mortgages. What was scary for voters was presidential candidate Barack Obama rushing to Washington to meet with Democratic and Republican leaders and the Treasury secretary at the White House to support the bailout of Wall Street banks. They ultimately bailed out the auto industry, too. And the Obama administration defended the payment of bonuses at the big banks, and no Wall Street executive was ever prosecuted for the deceit and the damage.
Some of these actions were no doubt critical to America avoiding another Great Depression and America’s financial sector rapidly gaining health, though overall they created a deep impression that government was there for the most irresponsible big businesses.
In the spring of 2010—a good year into the implementation of the American Recovery and Reinvestment Act—Democracy Corps asked voters, “Who are the main beneficiaries of the Economic Recovery Act?” Almost half, 45 percent, said the unemployed benefited a lot or some from the act, and a lesser amount, 34 percent, said the middle class was benefiting. But three-quarters said the big banks and financial institutions were the beneficiaries and 50 percent said they benefited a lot—more than eight times the number who said that for the middle class.34
Web survey of 2,671 adults nationwide conducted by Greenberg Quinlan Rosner Research for Citizen Opinion and the Center for American Progress, April 18–19, 2010.
When the voters looked at the president’s approach to the economy, they looked right past the Economic Recovery Act itself to the larger set of policies that revealed who the government really worked for. Maybe the public was more right than wrong.
7. Reforming money and politics
As we showed earlier, support for the economic agenda is much stronger if it is predicated on reforming government and politics. The public understands what role money plays in getting government to rig the system and the consequence for the middle class and inequality. They realize that political inequality is integral to economic inequality. They are connecting the flood of spending on campaigns to the principles of the new economy and the paralysis of government in the face of growing need. The scale of the corruption is embodied in the record-breaking flood of unregulated and legalized secret spending.
All of this has led to a new level of public revulsion and support for fundamental reforms. Super PACs are not arcane institutions. They are known by more than half of the voters and detested: seven times as many people react to them negatively as positively.35
That public consciousness has been expressed at every juncture. It is evident in the public’s rallying to higher taxes on the rich, to eliminating special-interest tax loopholes, and to treating investment income the same as wages. It is even evident in their mundane though considered reaction to short-term stimulus projects that look like they are part of the same system decision-making that has been corrupted by elite access.
The public knew that the Citizens United Supreme Court decision was a sham from the outset. They never accepted that spending to influence the outcome of elections was constitutionally protected free speech, or that corporations were people, or that campaign donations should be deregulated. When the Supreme Court made its groundbreaking decision to allow corporations or outside groups to spend unlimited amounts of money to influence elections, the public was opposed from the beginning—eight in ten Americans opposed the ruling, 65 percent strongly just weeks after the decision.36
The public very quickly concluded that the new fund-raising regime of big donors and secret money damaged something fundamental. Two-thirds were convinced it “undermines democracy”; 54 percent believed that strongly. Just a third accepted the counterargument that “money is always going to be spent in campaigns” and that this flood of secret money allows all candidates and points of view to be heard. Indeed, Republican defenders argued that this was business as usual and “just the way campaigns are run today.” That does not pass the smell test, however. Two-thirds of the public concluded that this system is “wrong” and “leads to our elected officials representing the views of wealthy donors who finance Super PACs, instead of representing all of us.” Half of Republicans also concluded that this funding regime is “wrong.”37
For the public, the consequences of this legalized system of secret and unlimited donations are self-evident. When they are asked which of the following has the most influence on members of Congress, the public puts “special-interest groups and lobbyists” and “campaign contributors” in a league of their own: 59 percent say the first has the most influence and 46
percent the second most. They are seen to wield the most influence in Washington, as political parties pale in power: just 29 percent choose party leaders as most influential. And when it comes to the “views of constituents,” only 15 percent say that they matter the most.38
The election of 2014 hit a tipping point in people’s tolerance for massive unregulated money and watching such pervasive negative advertising. Super PACs spent $348 million and 501(c)(4) organizations spent at least $118 million in 2014 to influence the House and Senate races, and it moved voters to a new place on reform. Voters now seem ready to reward politicians who offer the boldest possible reform of the campaign financing system and punish those who take huge amounts of money from the top 1 percent and billionaires and then proceed to protect their tax breaks and lower rates while failing to make changes critical for the middle class.39
The obvious starting point for reform is simple transparency. A nearly universal 85 percent of independents and both Republicans and Democrats would require corporations, unions, and nonprofits to disclose their sources of spending when they participate in elections.You know you have reached a threshold for reform, however, when three-quarters of voters in these states flooded with campaign money support a Constitutional Amendment to overturn the Citizens United ruling.40
You know this system is corrupt and the public is ready for fundamental reforms when 61 percent support “a plan to overhaul campaign spending by getting rid of big donations and allowing only small donations to candidates, matched by taxpayer funds.” That campaign finance reform wins over a majority of independents and 38 percent of Republicans. The American citizenry has become progressively more supportive of using public funds to empower small donations and barring big and corporate donations.41
Even in the face of charges that this is “welfare for politicians,” voters rally to a candidate who argues, “We need a government of, by, and for the people—not government bought and paid for by wealthy donors.” Nearly 60 percent of voters in the Republican-leaning 2014 Senate battleground states preferred such a reform position, and that was true with independents and supporters of both parties.42
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