Originally Posted: 2/15/17
Last Updated: 1/10/19
Jump to an Area of Potential Compromise:
Lower Effective Tax Rates for the Poor
Immigration Reform and Border Security
There is a lot of anger coming from the political left in America, much of it justified. Trump the President has been just as divisive as Trump the candidate. Many of those who after the election said “give Trump a chance” are probably questioning that sentiment. Every word and policy that has come out of the White House since Trump’s inauguration has reeked of incompetence and bluster.
What is a liberal, or even a sensible moderate, to do? What should they demand of their representatives in Congress? It is tempting to say that Democrats should act as the G.O.P. did towards Obama–with blind obstructionism. My question to this natural response is “to what end”? Where does it stop? It may help the Democrats retake the Senate in 2018, something I think the nation sorely needs to check the G.O.P. But then what? An eye on the 2020 Presidency? Is that really our best option as a nation–that nothing happens until 2021?
Call me naive if you like, but I still believe politics should be, and can be, a means to an end–strong policies that benefit the average American–and not just an end in itself. If there is an opportunity to enact positive changes in our nation, who cares which party “gets the credit”?
The question also remains whether the G.O.P. has any interest in working with the Democratic Party on any of these issues. The G.O.P. currently seems preoccupied with prematurely repealing the ACA and developing regressive tax policies. Trump’s first budget proposal does not address any of these issues, and in order to pay for his military buildup would cut funding to agencies which would ultimately carry out these policies.
But by picking its battles, the Democratic Party will have more political capital and public support when there is a core issue it really must fight for (see my other running list–The Democratic Party: Red-Line Issues).
Maybe a more tempered message of targeted obstructionism would backfire, extinguishing the fire that Trump’s election has lit under liberal activists. What the Democratic Party’s strategy should be going forward is certainly open to debate. My opinion is just that, an opinion–what I think is the best way forward.
Because it is my belief that it is in the best interests of both the Democratic Party and the American people for the Democratic Party to not be blindly obstructionist, I have decided to start a running list of areas of potential compromise. I will explain what the area of compromise is, why it is in the interests of each party to work together on it, and how the Democrats can push related legislation in a more progressive direction.
Update: 9/10/18: It is pretty clear Trump was never the “populist” he claimed to be. Let this list of common sense areas of potential bipartisan compromise (which I identified at the time of Trump’s election as a means of giving him the benefit of the doubt, despite what my intuition and his pre-Presidential record suggested) serve as proof.
Instead of pursuing any of these issues, Trump has instead spent the last two years sewing division within America and between America and her allies. Lets turn Trump into a lame duck this November!
Update 11/7/18: With the Democrats taking control of the House, perhaps the Trump administration will pursue some of these policies with bipartisan support. I think that Trump will instead double down on his agenda of division, trying to rev up his base with a new enemy (House Democrats “obstructing” his agenda)–I hope I am wrong.
Area: Infrastructure Spending
Trump trumpeted infrastructure spending during his Presidential campaign as a means of creating blue collar jobs and increasing economic growth. In theory, this is an obvious area for cooperation. However, with policy, the devil is in the details…
Why Democrats like it: Creates jobs in the short-run, boosts economic productivity in the long-run. Certain types of infrastructure spending can bring people closer to economic opportunities and prevent future damage / disasters.
Why the G.O.P likes it: Creates jobs in the short-run, boosts economic productivity in the long-run.
How to push policy in a more progressive direction: The “1 trillion dollar” proposal makes for good headlines, but how does Trump’s plan on getting to that number? Progressives want more government spending (which will generate more economic stimulus), conservatives want to rely more on tax credits (which costs the government less). Progressives also want funding for projects that will increase economic productivity, but are not necessarily the “revenue generating projects” (toll roads, bridges, etc.) that Trump’s proposals have favored.
The program also would be much more ambitious if it focused on a diverse array of infrastructure. For example new water pipes so more areas like Flint, Mi. do not crop up around the county and broadband internet access (see below), as well as traditional physical infrastructure.
Policy Developments: Even Trump’s watered down $200 billion infrastructure plan has failed to materialize, despite GOP control of both chambers of Congress.
Unless you count Domino’s “Paving for Pizza” initiative, the private sector has not filled this void (I’m joking, of course the private sector isn’t going to pay for non-revenue producing infrastructure–a central pillar of Trump’s infrastructure “plan”–in any meaningful way).
Vocational schooling has historically been look down on in America. Instead, students are funneled towards four year colleges after high school. College is a great option for many people, but it should be just that–an option. The “college-for-all” movement has led to ballooning tuition costs (as demand for schooling increases) and a huge student loan debt problem which has become a drag on the American economy.
A high school / community college and apprenticeship option should also exist for young adults about to enter the labor force.
Apprenticeships are making a comeback thanks in part to bipartisan support among lawmakers. In the last two years, Washington has allocated $265 million to spur programs. President Obama’s secretary of labor, Thomas E. Perez, a strong proponent, attempted to rebrand apprenticeships to appeal to educators and parents. During his tenure, the department established a partnership between registered community colleges and sponsors that allowed on-the-job-training to count as academic credit toward a degree.
“Apprenticeship is the other college, except without the debt,” said Mr. Perez, who had a goal of doubling the number by 2018. Advocates are hopeful that the trend will continue with new leadership in Washington, given President Trump’s familiarity with construction.
Obama’s Labor secretary Thomas Perez started such a program. Hopefully the next Labor Secretary continues Perez’s important work and scales up apprenticeship programs.
Why Democrats like it: By increasing wages, economic opportunity expands and in time social mobility increases, as worker’s begin to invest more in their children.
Why the GOP likes it: A prime area for a favorite tool of conservatives–Public Private Partnerships. Apprenticeships also have a blue-collar tinge, and should be very popular with conservative voters.
How to push policy in a more progressive direction: To fulfill the academic element of apprenticeships, there should be less reliance on for-profit colleges and more reliance on community colleges.
Policy Developments: Trump’s apprenticeship “plan” has failed to materialize as well.
Trump’s Apprenticeship Task Force, after taking months to determine the best course of action, decided to try to leverage private sector money (won’t work) and use existing funds more efficiently (recycled ideas that were already implemented years before the Trump was even elected) to boost apprenticeship spending.
Some “jobs President”…Guess we see how much Trump really cares about training the American worker.
Area: Improved Early Childhood Education
Ninety percent of voters, regardless of party affiliation, endorse quality early childhood education with expanded access and affordability for children from low- and middle-income backgrounds, according to a 2016 national poll by the First Five Years Fund. Early childhood education is a strong investment in our nation’s future, as cost-benefit estimates report societal savings of up to $13 for every dollar spent on quality early childhood programs.
As the new administration tackles the minefield of educational reform, we encourage them to consider spending in one area where public opinion and strong evidence converge. Let’s move quickly to endorse programs that start early (0-3), support parents, and are of the highest quality. We know what works.
Why Democrats like it: Promotes economic opportunity and increases social mobility.
Why the GOP likes it: Saves money by reducing future welfare and criminal justice spending.
How to push policy in a more progressive direction: Expanded access to quality early education should come through spending for the poorest, not through tax deductions. Any program based on tax deductions will fail to reach the lowest income children whose parents fall below certain income / tax thresholds.
Trump came back to the idea of federally funded early child education, one of his more progressive campaign promises, during his joint address to Congress.
However, his plan mainly benefits children of middle and upper-middle class families (single parents earning up to $250,000/yr or $500,000/yr for married couples), not those born into the poorest. Of course, as a family goes up the income ladder, they can more easily afford quality early child education on their own (or are more likely to have it provided by their job). So while still expensive (because it pays out to so many people), the proposed plan would have a muted impact on enrollment and therefore human development / social mobility.
Much work remains before this plan can be considered “progressive”–we’ll see if it ever gets there.
Area: Paid Family Leave
Polls show that the public is overwhelmingly in favor of paid family and medical leave. Support for the concept is bipartisan, with 83 percent of Democrats and 71 percent of Republicans in favor of this policy. Yet, the United States is the only advanced nation that does not have a paid leave policy at the national level.
Why Democrats like it: Low income parents would not have to choose between spending time with newborn babies and being able to afford life’s necessities. Scientific evidence (and common sense) suggests spending time with newborns is important for cognitive and social / emotional development, promoting equality of opportunity and social mobility.
Why the G.O.P. likes it: See above, this is a non-partisan issue as everyone has kids.
How to push policy in a more progressive direction: The Trump administration has signaled its interest in doing more on this front, but some aspects of its preliminary proposal could be improved. For example, the Trump plan focuses on maternity rather than parental leave available for both parents. This could exacerbate gender bias in hiring and reinforce the stereotype that mothers should be the primary caregivers.
Policy Developments: Trump plugged paid parental leave in his joint address to Congress. While this does not constitute a policy proposal, it is a positive development on the front.
Area: Lowering Corporate Tax Rates
America has a very high corporate tax rate (39.1). However, because of loopholes and other tax rules, our effective corporate tax rate is much lower (27.1%).
This disparity puts smaller businesses at a big disadvantage. Companies are rewarded based on the accountants and lawyers they can hire, not just on their competitive and innovative edges.
Why Democrats like it: Puts small businesses on equal footing with large corporations. Lowers the overall corporate tax rate, making American businesses as a whole more competitive.
Why the G.O.P. likes it: Same reasons as above.
How to push policy in a more progressive direction: While all businesses will support a lower corporate tax rate, these same interests will hire lobbyists to defend each and every loophole that Congress proposes to close to offset the lost revenue from said lower rate.
Failure to close enough loopholes while lowering the tax rate would be a giveaway to big business and blow a hole in the federal budget.
A related issue is repatriating trillions of dollars in corporate profits held abroad. These repatriated profits must be taxed at a reasonable rate coming back into the country. Furthermore, the policy must stipulate that some of the repatriated profits go towards hiring and business operations. Past repatriation efforts have failed in this regard, leading instead to stock buybacks.
Policy Developments: Trump’s tax plan cut rates to unsustainably low levels. This was certainly does not count as a “compromise”, and it made our countries financial situation much worse.
Area: Lowering Effective Marginal Tax Rates for People Coming off Government Assistance Programs
Effective marginal tax rates for low income workers who are on the cusp of coming off government assistance programs are very high. This can cause a disincentive to work, and could explain some of the drop in prime-age labor force participation rates.
To remedy this problem, Congress could expanding the Earned Income Tax Credit (EITC–a Trump campaign proposal) in exchange for pairing back some assistance programs (particularly those targeting adults without dependents). Notably, the EITC should be increased for low wage workers without child dependents.
Why Democrats like it: By taking prime-age adults without dependents off assistance programs, said programs would come under attack less frequently, as they target the most deserving beneficiaries–children.
Why the G.O.P. likes it: Reduces the number of people receiving government assistance (“takers”), reducing government spending. Increased labor force participation.
How to push policy in a more progressive direction: Expanding the EITC, higher minimum wages, create more potential jobs by creating government jobs.
Policy Developments: Fail, moving in the wrong direction, whatever you want to call it. Somehow the Trump administration and the GOP managed 1.5 trillion in tax breaks over the next decade without expanding the EITC in a meaningful way–incredible (in a bad way).
Even purported improvements in Trump’s tax plan related to the EITC fall apart upon closer scrutiny:
- Instead of Boosting Working-Family Tax Credit, the GOP Tax Bill Erodes It Over Time
Child Tax Credit Increases in GOP Tax Plan Exclude Millions of Children in Low-Income Working Families
New York City and Atlanta have implemented a real EITC-based poverty reduction plan, called “Paycheck Plus”, which increases EITC benefits to workers without child dependents. The results from NYC so far are promising (Atlanta results have not been analyzed yet).
It appears our labyrinths of democracy (at least those that can afford it, like NYC) will have to make up for the regressive governance of the GOP / Trump administration. While this is good news for the participants, it is no replacement for stronger national poverty reduction policies. Still, positive results from these pilot programs will ultimately make it harder to resist them at the national level.
Area: Expanding Broadband Internet Access
(For more information, see this Brookings report on where gaps in Broadband coverage exist, and how to address them)
Why Democrats like it: Being disconnected has become an impediment to economic opportunity. Children need internet access to complete their schoolwork; adults need internet access to apply for jobs.
Why the GOP likes it: This would create jobs, similar to physical infrastructure. It would also benefit traditionally conservative rural communities.
How to push policy in a more progressive direction:
There are two issues here–affordability and access. Both should be addressed as part of an effort to expand broadband internet access.
For low income urban communities broadband internet exists, but it may be prohibitively expensive. Since cities have higher population density, there are also bandwidth issues to consider.
For low income rural populations, broadband internet may not even be an option. The infrastructure required to reach these areas can have high upfront costs. Low population density and low incomes means private companies may need government incentives to connect these areas.
Another question is what form should expanded broadband access take? Free public wifi may make more sense in urban areas–which could cost more in total dollars but have a lower per-person cost. Subsidized private access in homes may make more sense in rural areas. There are still many details to be worked out.
Policy Developments: The new FCC head Ajit Pai appears to be moving the U.S. in the opposite direction. He has suspended nine companies from providing discounted internet service to poor people through a program known as Lifeline. The Pai FCC has doubled down on this attack on subsidized internet access by voting to limit funding for Lifeline.
The Democratic Party, for its part, has included expanded broadband internet access in their proposed infrastructure plan.
Area: Criminal Justice Reform (Success!)
Although rates of drug use and selling are comparable across racial and ethnic lines, blacks and Latinos are far more likely to be criminalized for drug law violations than whites.
The “War on Drugs” disproportionately affects minorities. Starting with Eric Holder under the Obama administration, the country seemed to be moving in the right direction on criminal justice reform.
Why Democrats should support it like it: Injects an element of racial justice to a very racially biased criminal justice system. Promotes social mobility by keeping families together and people in the workforce as drug users get treatment.
Why the GOP likes it: The reasons above. Criminal justice reform can also save a lot of money.
How to push policy in a more progressive direction: Promote criminal justice reform at state level, where most people are incarcerated.
Policy Developments: The 115th Congress finally passed it’s first major piece of common sense, bipartisan legislation (with only days to spare before the 116th takes over on Jan 3rd).
The “First Step Act” implements the following major changes: to America’s criminal justice system:
“Under the bill, maximum penalties are maintained for violent felons and drug kingpins.
But mandatory minimum penalties are reduced for others by giving judges expanded discretion when handing down sentences. And prisoners can earn time credits toward their release to halfway houses or home confinement.
In an attempt to discourage repeat criminal activity by those released from confinement, the bill bolsters employment and training opportunities for those serving sentences. The U.S. Bureau of Prisons also would be required to evaluate experimental programs aimed at treating heroin and opioid abuse.
Key changes in the bill will be retroactive.”
Area: Drug Price Controls
It is no secret that America’s healthcare system is broken. We pay far more for both medical services and prescription drugs than other developed countries. The only benefit is that, at on end of the spectrum, those with unlimited money can afford some of the best healthcare in the world (arguably; many athletes, for example, still go abroad for surgeries).
This “benefit” of our for-profit healthcare system does not even come close to outweighing the very real cost of unaffordable healthcare that the vast, vast majority of Americans face. The ACA (“Obamacare”) tried to fix some of these issues, by making it illegal for companies to deny customers coverage for pre-existing conditions, and making sure all plans covered certain essential services (so people were not just buying into hollow plans that were worthless when they needed them).
This was a first step towards making healthcare more affordable in America. I personally support the “public option” for anyone to buy into Medicaid, while still allowing private insurance companies to compete in the industry. Many progressives want to go all the way to a single-payer government run healthcare system, which I think would be too disruptive a jump from where we currently are.
The Trump administration, unsurprisingly, has not taken more progressive steps thus far. To the contrary, it has done everything it can to undermine Obamacare, to the great detriment of Americans who buy their insurance through the individual marketplace. There is nothing to suggest this will stop or be reversed anytime soon.
One area of potential bipartisan support, however, is getting drug prices under control. This could be an area where Americans actually see some relief, as it could be a legislative priority for the Trump administration now that the Democrats have taken over the House.
Why Democrats should support it like it: Cheaper drugs are good for the American consumer, and would save the government money
Why the GOP likes it: Same reasons as above, this should not be a partisan issue at all
- Medicaid Drug Prices: Medicaid cannot currently negotiate directly with drug manufacturers, which leads to significantly higher drug prices for the U.S. government and Medicaid recipients. In October Trump proposed something of a fix, although it falls short of his campaign promise of allowing Medicaid to negotiate directly with drug manufacturers. Trump’s fix would have Medicaid base it’s drug prices off other countries prices. Since those countries tend to negotiate prices directly with drug makers, this would be a roundabout way of getting cheaper drug prices for Medicaid recipients, without allowing Medicaid itself to directly negotiate (direct negotiations make more sense IMO, I’m sure the drug lobby is fighting hard against this).
- The CREATES act: “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, would allows generic companies to sue brand-name drug companies to get samples [and therefore develop more generic drugs]. The Senate version has 30 co-sponsors, fairly evenly split between the two parties.”More generic drugs would, of course, lower drug prices for all consumers, not just Medicaid recipients / the U.S. government. If you believe the pharma industry the downside would be less R&D into new, groundbreaking drugs. I do not believe the pharma industry.
- “Senator Bernie Sanders and Representative Elijah Cummings plan to introduce legislation aimed at lowering the cost of prescription drugs for U.S. consumers:
The Sanders and Cummings bill would peg U.S. prescription drug prices to the median price from five countries – Canada, Britain, France, Germany and Japan – where drug costs are typically far lower because of government price controls.That is similar to a proposal the Trump administration said it plans to put forth in the coming months that would create an “international pricing index” to help the cost of prescription drugs to Medicare more closely align with other countries. The government health insurance program covers more than 40 million older and disabled Americans.
The bill would also allow the U.S. Secretary for Health and Human Services (HHS) to negotiate prices in Medicare Part D, a program that helps Medicare beneficiaries pay for self-administered medicines like those purchased at drugstores.
The proposal would also end a ban that keeps Americans from buying medicines at lower prices from Canada and other countries.”
I will keep this page updated with any developments on these two health policy initiatives.
Area: Data Privacy
Democrats and Republicans alike have massive amounts of personal data online. This data is valuable for private businesses, and can be beneficial to consumers by providing ads for options and deals for the products and services they need (like how Facebook knows what types of products you have recently searched for).
However, data privacy is important. This is clearly an example of technological advances outpacing legislative protections. Thankfully there are a number of measures being considered by both chambers of Congress, in a bipartisan fashion, to address this issue. A recent Brookings post outlines these efforts.
“What is striking to me [Cameron F. Kerry, Brookings contributor and former Obama Administration official] is how far the discussion has come over the past couple of years. I have written about how the existing paradigm of U.S. privacy laws has become a losing game because it relies on consumer choice that puts the burden on individuals to manage their privacy and data. Emerging bills and the various frameworks and comments reflect a clear move toward shifting the burden onto companies to handle data fairly.”
This distinction between “consumer choice” versus corporate accountability is incredibly important in this instance. People are busy and cannot be expected to fully understand the potential costs of giving out their personal data (versus the convenience benefits).
By shifting the burden to companies, it would make it their responsibility to engage ethically with people’s personal data. Hopefully any legislation on the matter codifies this corporate responsibility.
Area: Immigration Reform and Border Security
While I do not agree with Trump’s desire to build “The Wall”, and see latent racism in his immigration rhetoric and policy proposals, America’s immigration system is broken. We need, among other things:
- An avenue to legal citizenship for undocumented workers who have overstayed their Visa’s and “Green Card” holders
- A way on controlling migration into our country, as well as a way to keep track those who enter (border security)
- Protection for people who came into the country while our immigration system was broken (undocumented workers, “Green Card” holders, and “Dreamers”).
Trump is correct, there is a national security element to knowing who is in our country. There is also an economic justice element of bringing people out of the shadows and into the formal economy, where they would be subject to U.S. labor standards and minimum wages. Hopefully, once this partial Government shutdown is over, Congress can work on fixing our immigration system in an effective and bipartisan manner.
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