According to an Allstate/National Journal-Heartland Monitor poll released last Tuesday, "Americans see a middle class with less opportunity to get ahead, less job security, and less disposable income than the middle class of previous generations," Charles Blow writes in the New York Times.
This fact should lend credence to Obama’s 2014 budget proposal, released earlier this month, which calls an economy that creates good middle-class jobs “the North Star that guides our efforts.” Mr. Obama’s proposal offers a pragmatic and comprehensive strategy to restore a healthy middle class.
In achieving this goal, Mr. Obama’s budget targets inequality, which has increased radically since the 1980s. There are three main proposals that aim to narrow the income gap between middle- and upper-class Americans.
First, the budget increases the federal minimum wage from $7.25 an hour to $9 and indexes it to inflation. Mr. Obama writes that this will ensure that “hard work leads to a decent living.” But we can also hope for other benefits. By more fairly compensating workers, we might expect increased demand, which could spur significant economic growth, from which the middle class would prosper.
On the other end of the income spectrum, the budget calls for the so-called “Buffett rule,” which requires families whose income is more than $1 million a year to pay at least 30% in taxes. This is a key element of the bill that both ensures that high earners make a fair contribution to our government and, if incrementally, will help to ameliorate the divide between America’s top earners and average workers.
“We should not ask middle-class senior citizens and working families to pay down the rest of our deficit while the wealthiest are asked for nothing more,” Mr. Obama writes. “That does not grow our middle class.”
Finally, the budget calls for considerable improvements in education. It proposes an initiative that would provide public preschool education for four-year-old Americans, funded by a cigarette tax; and it also includes an interesting new fund that “rewards schools that develop new partnerships with colleges and employers,” so that students can find jobs “right away” or go to college after graduation.
The idea here is that American children whose parents cannot afford to send them to private preschools or to college will not be at a disadvantage when they enter elementary school or when they try to find jobs after graduation, due to wealth inequality.
To improve the odds of the bill’s passage, Mr. Obama has made an earnest effort to meet Republican demands halfway. His proposal promises to cut the deficit by another $1.8 trillion over the next 10 years, bringing the deficit below 2% of GDP by 2023; and it also proposes changes to Social Security and Medicare that would save $630 billion over ten years. The changes have been met with invective from his own party. Mr. Obama, however, emphasized that he would only support the changes if Republicans agree to tax increases for the wealthy.
An email from Congressman Alan Grayson (D-Fla.) was headlined, “President’s Budget Breaks Promise to Seniors,” the New York Times reported. But this criticism, though not without merit, is too harsh. In order to spare the younger generation from taking on a substantial burden to pay for the older generation’s lavish retirements, we must begin to change these programs now. What’s more, Obama has to contend with the mania still gripping the Republican party, which will probably prevent a budget even as moderate as this one from making it into law.