The 2026 midterms are coming up, but many are already looking past that to the 2028 presidential election. If the generic ballot polls are any guide, the Democratic Party is likely to win decisively this year, and if Donald Trump’s approval ratings continue on their present course, and democracy can persevere for another couple of years, they will also win the presidency. So what should Democrats do with another trifecta?
The centrist group Third Way is taking a break from its anti–Hasan Piker vendetta, and laying down an early marker with a policy agenda called a “New Economic Bargain.” The ideas range from pretty good, to meh, to bafflingly bad. But what stands out most is a lack of originality. The document reads as if someone took Bernie Sanders’s 2020 presidential agenda and made most of the ideas 50 to 75 percent worse for no discernible reason.
I’m calling this progress.
First, the good. Third Way wants to dramatically raise taxes on the rich by equalizing the tax rate between labor and investment income, raising the corporate rate, and ending the “step up basis” loophole that lets oligarchs pass on their fortunes to their heirs tax-free. A $15 minimum wage is good as well. I would go further—barely anyone is paid $15 per hour these days; I’d start at $20 to have a stronger effect—but that would be a great start.
Third Way also wants to build 50,000 miles of high-voltage transmission lines across the country to strengthen the electric grid and keep the electrification revolution moving forward. How they’d do this is unclear, but this is simply a necessity to meet any serious climate goals. The group would also make AI companies pay for necessary electricity generation and grid upgrades so that ordinary people’s power bills do not go up when data centers are built. All to the good.
Then there is a grab bag of various tax credits and half measures. Third Way would set up universal private retirement accounts and require that minimum-wage employers send an additional dollar on top of their $15 to these accounts. This would be better than 401(k)s, but not by much. Every tax-advantaged saving scheme is heavily biased toward rich people. Those with large incomes obviously have more to save, more tax liability to reduce, and tend to have more experience navigating the hideously complicated American bureaucracy—or can hire someone to do it for them. That’s why 401(k) benefits are allocated inversely proportionally to need. Any private retirement subsidy would be far inferior to setting up a much more generous minimum Social Security benefit.
Then there are the simply bad ideas. Third Way wants a “public college compact” whereby tuition is guaranteed for four years, and then different levels of government and the student take turns paying for each year. “Freshman year, America invests in your potential. Sophomore year, your state invests in your persistence. Junior year, your college invests in your success. Senior year, you invest in your future.” The sole motivation for this policy seems to be this risible, airport self-help book kind of slogan.
Merits aside, it would be much simpler to just provide free tuition at public universities. Which, incidentally, would cost less than the status quo dog’s breakfast of loan subsidies, grants, and so on.
Third Way also wants to subsidize used-car loans through the same kind of guarantees the government uses for home mortgages. This has similar problems to subprime mortgage subsidies in the early 2000s: Such loans carry a high interest rate because they are likely to default, which will increase if more people are eligible, and automakers and dealers will soak up much of the subsidy by raising their prices even more. It would be better to just make the welfare state more generous and push automakers to make small, cheap cars, like how Japan does with “Kei” cars.
The most telling policies, however, are the ones where Third Way is clearly trying to adapt some classic progressive ideas. With some, they compulsively lop off a chunk of the program—they want to bring back Joe Biden’s point-of-sale tax credit for new EVs, for instance, but make it even more means-tested. The old version phased out at $300,000 for married couples, $225,000 for heads of household, and $150,000 for everyone else, but Third Way thinks that is too much (how much, they don’t specify).
The problem with this is that the EV credit was a climate policy. The point was to get everyone to switch over, including the rich, to cut greenhouse gas emissions. Indeed, given that rich people drive more and are also much more likely to buy new cars, arguably the credit should not be means-tested at all. Any distributional unfairness can be reversed with a slight bump in the top income tax rate.
It was also an industrial policy to nurture a homegrown EV and battery production industry. Making the tax credit less useful will reduce demand and therefore the number of factories and autoworker jobs sustained by the policy.
With health care, Third Way has an extensive agenda which carefully tap-dances around the obvious way to achieve it, namely, Medicare for All. Among other things, they want to cap costs throughout the system, end medical debt, allow anyone to see any doctor, end health care deserts, ban junk insurance, stop provider price-gouging, set up a centralized medical record system, and ban surprise billing (which is already banned, and the Third Way–style solution isn’t providing better outcomes).
If the Obamacare rollout proved anything, it’s that achieving reform through regulation alone would be immensely difficult and expensive—particularly allowing anyone to see any doctor by capping out-of-network prices, which strikes at the heart of the status quo private insurance system.
If you were to pass Medicare for All, however, you could achieve almost all these goals at a stroke. If everyone is on one insurance program, every provider would have to accept it, and one medical record system would have to be set up. Junk insurance would vanish instantly. Provider prices would be whatever the government sets. Surprise bills and medical debt would end. What’s more, this would guarantee permanent insurance coverage for everyone—which is bizarrely not included among Third Way’s health care goals, despite the fact that almost 1 out of 10 Americans under 65 are uninsured, and that number will increase a lot soon thanks to Trump’s Big Beautiful Bill.
Why not do that? It’s not addressed, except with comments like “We are not going to throw out the baby with the bathwater.” It seems if the change is too big, then we can’t do it. But big problems, like the immense concentration in the medical sector (also not addressed by Third Way) will require big solutions, whether it’s Medicare for All or something else.
I conclude that groups like Third Way do not have some worked-out moral vision of the world coupled to policy ideas that would make that vision a reality. What they would like to do is claim the center ground roughly between the parties, wherever they happen to be. But the Republican Party is a personality cult centered around a senile madman, uninterested in earnest policy discussions about helping the American people. If the GOP does pass anything, it invariably makes everything worse for everyone except the party’s billionaire funders. So Third Way ends up shadowboxing a left that wants to Do Too Much, and arguing we should Do Somewhat Less instead. Even the title of their big policy agenda is a cut-rate FDR rip-off.
As a theory of politics, this leaves much to be desired, but as an indication for who has the policy-intellectual high ground in this country, it’s encouraging.
