There is a far more important political question right now for Sen. Elizabeth Warren (D-Mass.) than the continuing attempts to coax her into a presidential campaign and her dogged refusal to take the bait.
She, along with Rep. Elijah Cummings (D-Md.), on Tuesday launched “The Middle Class Prosperity Project” with a forum on Capitol Hill featuring four economists with a progressive view of income inequality and its causes. Could this project, using Warren’s distinctive voice, help progressives present a bold alternative not only to destructive conservative policies but the Band-Aids and incremental measures of some mainstream Democrats?
Warren and Cummings made their aim clear in an op-ed published Tuesday in USA Today. The hearing at the Hart Senate Office Building was “the first in a series of forums to examine economic policies threatening the middle class” and “how to help families rebuild economic security.”
Warren elaborated in her opening statement, which chronicled how wealth gains shifted away from the middle class and to the top 1 percent over the past three decades “because of deliberate policy choices made in Washington.”
She acknowledged that Republicans have finally accepted the reality of a shrinking middle class and extreme wealth inequality, but added, “They seem to have amnesia about what they’ve done” to bring about those conditions. A goal of the project, she said, is to “push Congress to take action on behalf of working people.”
Cummings echoed that theme. “Our first step is to understand the problem,” he said in his opening statement. “Then, in the coming months, we will convene additional forums to formulate concrete proposals to reverse these trends.
“But let’s be clear. The goal of this project is not just to talk. It is to identify and implement real solutions.”
The opening forum was heavy on diagnosis rather than prescriptions, but some important agenda items emerged.
Jared Bernstein, economist with the Center for Budget and Policy Priorities, directly confronted the bipartisan consensus, shared by the Obama administration, that tax reform should be “revenue neutral” – that it should not result in corporations and the wealthy carrying a heavier tax burden. Many of the tax breaks that go to corporations and top earners have the effect of deepening inequality while contributing little to investment, productivity, job-creation or growth. Eliminating them “in a revenue-positive manner would provide significant resources to invest in breaking down opportunity barriers that result from our high levels of economic inequality.”
Beth Ann Bevino, chief economist with Standard and Poor’s rating service, noted that the millennial generation is “facing a number of headwinds” that will have a long-term impact on their earning power and financial security. This is not only the generation that graduated out of college and landed into the worst job market in a generation and into today’s trend of stagnant wage growth, but this generation will be weighed down by more than $1 trillion in student loan debt.
Gerald D. Jaynes, professor of economics and African-American studies at Yale University, said that policy makers should not just fight for a minimum wage but also “pursue tight labor markets,” driving unemployment below 5 percent.
Columbia University economist Joseph Stiglitz pointed out how “even working has become, in a sense. a burden” for working families because of our inadequate investments in public transportation, the lack of affordable child care, and costs that take a disproportionate share of working-class paychecks, such as housing, education and health care, that are rising much faster than the general rate of inflation.
“Investments in decreasing inequality and increasing equality of opportunity make sense not only for our economy, but for our budget,” he said. The policies he said were important include more support for education, strengthening the earned income tax credit, giving more bargaining power to workers in the workplace, more effective enforcement of antidiscrimination laws, and better regulation of financial markets to curb excess speculation and manipulation, end CEO pay abuses, and protect consumers.
These are some of the threads of what could be an expansive agenda that would hold both political parties accountable for their roles in bringing about today’s Gilded Age economy.
Toward the end of Tuesday’s hearing, Cummings said that some people have asked him, “why bother,” given that the Republican-controlled Congress has shown no inclination to move forward on these policies. While that may be true, he said, “I believe we do not have the right to remain silent.”
As Warren put it at the end, it’s time for Washington to “stop doing the business of the billionaires and do the business of the American people.”