America may get its two-party system back after November. But the competition could turn out to be neoconservative Republicans versus Eisenhower Republicans, with the latter played by Democrats. As the society becomes more unequal and working families face increasing economic stress about their jobs, wages, pensions, health coverage, housing, and child-care costs, a considerable faction of the Democratic Party contends that government neither can, nor should, address these ills. That would leave the Democrats as the party of fiscal stewardship, token programs, and empty talk -- none of which addresses ordinary people where they live.
One strand of this argument contends that, despite rising insecurity and inequality, most people are doing fine; so it's a mistake for Democrats to emphasize pocketbook issues, lest Democrats become a minority party of the poor. The ur-text for this view is Stephen Rose's April 2006 piece for the Democratic Leadership Council, “The Trouble with Class-Interest Populism.” We invited Rose and several others to debate this question on the Prospect Web site (www.prospect.org/middleclass). Have a look. This has to be the key domestic policy battle for the Democratic soul.
In fact, Democrats' pocketbook programs have never been for the poor only. The best ones have addressed the economic opportunity and security of the working middle class, the working poor, and the needy alike -- cementing a political alliance among everyone who is not independently wealthy. The most expansive and popular programs -- like Social Security, Medicare, the GI Bill, and federal college aid -- served these twin economic and political goals. That's why Newt Gingrich was so determined to kill any version of universal health insurance, lest it bond a new generation to the idea of benevolent government with Democrats as the reliable custodian.
At no time since the Great Depression have the working poor and the working middle class had more in common in their economic vulnerability, or been more in need of cross-class government programs, such as reliable pensions, health insurance, protections against income loss, and new needs of the broadly defined working family, such as child care. To the extent that a class war is going on, it is the top 1 percent versus the bottom 80 percent. That's a war progressives can actually win.
If the claim that activist government addresses only “the poor” is a canard, so is the contention that regular people are economically content (recently echoed by New York Times columnist David Brooks, favorably citing Rose). Several public opinion polls by reputable pollsters such as Pew, Hart, and Lake, released just before Labor Day, found that a majority of respondents believed the next generation would be economically worse off. Majorities exceeding 60 percent expressed serious worry about losing health or pension benefits, losing or never buying a home, and not being able to afford to retire. And these were mostly middle-class respondents. If there is not political pay dirt for progressives here, where is it? Perhaps in elite campaigns to balance the federal budget?
As it happens, that's exactly what another group of center-right Democrats is arguing. Robert Rubin's Hamilton Project is the perfect fiscal complement to Rose's counsel of economic complacency. The Hamilton Project calls for greater opportunity, but the fine print divulges the principal goal -- restoring fiscal balance with a cap on Social Security and Medicare, and dedicating higher tax revenues mainly to budget discipline.
Fiscal responsibility is necessary, but not an end in itself. Balance can be achieved with low social spending or more adequate spending, and with or without progressive taxation. It's hard to imagine redressing inequality and insecurity without activist government. If the main purpose of the Democratic Party has dwindled to responsible stewardship of a government ever less equipped to make a positive difference in the lives of ordinary people, Grover Norquist will have won his crusade to marginalize both government and Democrats.
Bob Woodward reported Bill Clinton's outburst in early 1993, when Clinton's advisers were insisting on the primacy of budget balance. “Where are all the Democrats?” the new president fairly howled in dismay. “We're all Eisenhower Republicans.”
Actually, that slights Dwight Eisenhower, who expanded Social Security, launched the interstate highway system, and increased federal research and education aid, much of it disguised as national defense. I actually had a National Defense Foreign Language Fellowship to study an esoteric language, Spanish. And under Ike, the top income tax rate for the wealthy was 91 percent. Ah, the progressive '50s.