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Screwing the Very People Who Gave Him the "Mandate"

I noticed something interesting things in the Center on Budget and Policy Priorities' analysis of what seems to be the newest iteration of the Bush Social Security plan, one that combines private accounts with "progressive price indexing," presumably modeled on the Pozen plan. This plan is not a significant redistribution from the well-off to the poor, rather it's a big hit on people at about the $60,000 earnings level, or the equivalent in the future.

From progressive price indexing alone:

A worker who earns 60 percent above the average wage -- about $59,000 today --  and retires in 2055 would face a 31 percent benefit cut.(These figures are based on the Social Security actuaries? analysis of the progressive price indexing proposal.)

And with the private accounts, and the proportionate reduction in Social Security benefits based on gains in the account:

For a worker who earns 60 percent above the average wage (about $59,000 today), the reduction in Social Security benefits would be 87 percent -- from $29,300 a year to $3,750 (in 2005 dollars), or a reduction of more than $25,000 a year. 

Elsewhere the Center notes that the reduction in benefits for a worker earning $60,000 would be almost as great (85% as large) as the cut in benefits for someone earning $6 million.

Now let's look at another factor. How did people in that $60,000 and slightly higher range do under the Bush tax cuts? According to the Tax Policy Center, households with income in the $50,000-$75,000 range had their federal taxes reduced on average by a little under $1,200 under the three tax cuts. That's a cut of 9.5%. Nothing to sneeze at, that'll pay the car insurance for a few months. But, as a percentage tax cut, it's less than those who earn less (households in the $20,000-$30,000 range got an 18% tax cut), and also less than those who earn more (households in the $100,000-$200,000 range got a 10.4% tax cut, and households making a million dollars or more got a tax cut averaging $103,000.

At the risk of getting too lost in the weeds here, the Tax Policy Center also has a way of looking at the tax cuts as what they are -- deferred taxes, which will eventually have to be paid for. Assuming that the financing of the tax cuts is distributed proportionally based on existing law, the cuts become a really raw deal for those $50,000-$75,000 households. Only 24% of them have any real tax cut at all, and their after tax income actually declines. The millionaires still come out way ahead, though.

(I know that I'm mixing apples and oranges, individual earnings for Social Security and household earnings for income tax data. An individual earning $60,000 might be in a household with earnings of much more than $60,000. Perhaps someone at one of the fine institutions cited here can disaggregate the data successfully; for my purposes it's enough to note that households in the $75,000-$100,000 range did not do much better under the Bush tax cuts, receiving an average cut of 10%.)

Now let's look at another bit of data: Where did Bush's votes come from? Every income group below $50,000 voted for Kerry in 2004. But in the $50,000-$75,000 category, Bush took over, winning that group 56/44. Bush's biggest gain over his 2000 vote was in this category, and he even did a little better in this group than in the group earning $75,000-$100,000.

People earning $60,000, or households in that range and slightly above, are not rich. They're the very heart of the American middle class. And they are where all the stresses and anxieties and risks of middle-class American life come together. There are no supports at that level, no Medicaid, no subsidized child care, no need-based financial aid for college. But it's not enough to be secure, either. The cost of college is terrifying, as is the possibility of losing a job and health care. The pressures of work and family are acute at that level. If you own a home, at that income level, you're fortunate but in much of the U.S. it will be very difficult to buy a home in an area with good schools. It's the level of income where you think you ought to be secure and comfortable, as your parents were, but no longer are.

This group showed a real confidence in Bush, and yet they either get screwed or get forgotten every time. If the Democrats can't find a way to speak to the realities of life for people who have been so betrayed by their political leaders, it will be truly shameful.

Posted by Mark Schmitt on May 3, 2005 | Permalink

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Comments

No it's true. I'm 29, and I can't imagine ever having kids at this point, because look sending a kid to U Mass really isn't an acceptable option.

But then I won't have anyone to look after me in my old age.

Posted by: Abby Vigneron | May 3, 2005 11:19:53 AM

The problem is, though, that the "realities of life" as you put it are more than just financial insecurity. A lot of people in this category really resent the way Democrats dismiss their social concerns and what I would call nationhood concerns. I think a lot have decided that the Republicans are "more like them" than Democrats. It's not like middle class people are going to identify with a bunch of Ivy-League educated policy wonks. I sense a lot of consescension if not downright contempt among liberals for these people because they don't vote the "right" way. Until Democrats stop thinking they have a divine right to have these people vote for them, they won't be very successful regardless of the economic realities.

Posted by: Marc Schneider | May 3, 2005 1:16:01 PM

> But then I won't have anyone to look after me in my old age.

Hehe, this is not a reason to have kids in a modern economy. Actually, the single biggest thing you can do to ensure a comfortable retirement (at least financially) is NOT have kids.

Single biggest statistical predictor of personal bankruptcy? Children.

Posted by: dave | May 3, 2005 3:53:58 PM

"It's not like middle class people are going to identify with a bunch of Ivy-League educated policy wonks." Oh really? Would it be condescending and dismissive of "nationhood" concerns of me to point out that I'm actually one of "these people" you seem to think my ivy-league education has equipped me to loathe. At the very least, I'd presumably be able to identify with myself. As for all my lesser educated middle-class breatheren, I don't owe them anything more than honesty and respect. But that doesn't mean that I'm even remotely afraid to call it like I see it and tell those interested in my opinion how and why I disagree with their allegiance to the current incarnation of the Republican party.

Posted by: fnook | May 3, 2005 8:43:21 PM

The LA TIMES recently had a series of articles showing how the policies of the last twenty years have shifted the uncertainties of life from large organizations to the individuals and nowhere more so than to the middle class. Look at the recent bankruptcy law, the shift from defined benefit retirement plans - common in the 50's and 60's - to the defined contribution plans like the 401(K) plans of today. And the biggest change is the introduction of the layoff, once a blue collar staple, to white collar middle management. Paul Craig Roberts has pointed out the rise in unemployment among COLLEGE grads as well as the disappearence of jobs for engineers and managers. The old paradigm of education as the key to success is breaking down. It would be easy to blame "red" voters for getting taken and say "we told you so" but what answers have Dems come up with to ease the anxieties of these people?

Posted by: richard lo ciceror | May 3, 2005 8:57:37 PM

Uh, one excellent Democratic idea designed to ease the anxieties of "these people" is this thing called universal Social Security. It's a backstop that helps ease the pain of the corporate urge to socialize risk to those least able to shoulder it. What have the Repubs come up with lately to ease the anxieties of "thse people"?

Posted by: fnook | May 3, 2005 10:42:56 PM

I don't really mean to argue against your main point - I accept that an annual income of $60K is an indication of neither enormous wealth nor freedom from from concerns about economic security - but I am confused by what definition of "the very heart of the middle class" leads to the conclusion that individuals earning more than 73% of men, and 87% of women (both percentages show the proportion of individuals earning less than $50k/year), or households with an income greater than more than 71% of of all tax returns filed in 2002 (71% covers returns up to $50k) fall in that category. I would usually figure the heart of the middle class is in the $25k to $50k range, with somewhere between $60k and $100k being the upper end of where you can really still put someone in the middle class at all.

(Data sources: Individual income, Census bureau CPS - Income Tax Filings, IRS)

Posted by: lornix | May 3, 2005 11:58:18 PM

I wonder what the moral values voters in Kansas think of this (or the anti-sodomy voters in Alabama). Oh, right, they don't. That's the problem. So much for rational choice theory.

Posted by: Michael Stickings | May 4, 2005 1:55:37 AM

"As for all my lesser educated middle-class breatheren, I don't owe them anything more than honesty and respect. But that doesn't mean that I'm even remotely afraid to call it like I see it and tell those interested in my opinion how and why I disagree with their allegiance to the current incarnation of the Republican party. "

Fine, but as someone else pointed out, what have the Democrats really done to make these people think they would be better off? Social Security is fine but it doesn't do anything about today. The fact is that the problems of the middle class are structural and the Democrats don't have any better idea of how to resolve it than the Republicans. Blaming the Republicans alone for all the ills of the middle class is silly because they started long before the GOP took over. Most of the people recognize that things weren't really much better under Clinton than under Bush. So, I don't see why it's irrational for middle class voters to vote Republican when their social values are far more congruent. I have nothing against Ivy League educations, obviously, and I apologize for offending you. But the fact is I have seen too many people (and maybe they are not Ivy League educated) speak of the middle and working classes as if they are a bunch of rubes, too stupid to understand the superior intellect of Democrats. Voting is, IMO, often a visceral rather than an intellectual action (even among people who follow politics) and it seems to me that many of the people that Democrats think should be their natural constituency simply aren't comfortable with the Democrats (at least at the national level) regardless of how much their economic interests might argue in favor of Democrats. That seems obvious from the election. I don't have any particular remedy for this but it's something that Democrats have to address.

Posted by: Marc Schneider | May 4, 2005 9:33:50 AM

I have seen too many people (and maybe they are not Ivy League educated) speak of the middle and working classes as if they are a bunch of rubes, too stupid to understand the superior intellect of Democrats.

I think that is as more a percieved problem than a real one. The GOP has mostly chosen to play to resentment - for years and years. That's their game. I hear the 'dems are condesending' trope over and over, but when I look at actual dem politicians, I don't see so much condesention. When Republicans try to sell you a bill of goods, (like their version of 'tax fairness') and Dems call bullshit on em, are the dems being 'condesending' to you because you bought the bill of goods? If you clearly vote against your own interest - and against the interests of our 'nationhood' (massive tax cuts for the wealthy in the middle of a war, anyone?), then you ARE being stupid, IMO, and that's not the fault of the dems (and contrary to the trope, you'll never hear a democratic politician say so).

Voting is, IMO, often a visceral rather than an intellectual action (even among people who follow politics) and it seems to me that many of the people that Democrats think should be their natural constituency simply aren't comfortable with the Democrats

There is a big difference between being a citizen and being a consumer. A consumer tends to make decisions more 'viscerally', regardless of the facts. A citizen, on the other hand, has responsibilities, not just rights (or 'fancies'). A citizen is simply not doing their job if they take 'Clear Skies', or 'Reforming Social Security', or 'Tax Fairness' at face value, or if they lazily assume that there's no difference between candidates (that they ALL suck so why bother making an informed decision?).

Does all this sound 'condesending'? Well, I contend that I'm not looking down on you; you've put yourself down by being conned and want to blame somebody for it. I mean, LOOK at the recent Medicare, Bankrupcy, Energy, Budget bills. They are heinously bad, and they hurt the very people who voted for Bush (and the country as a whole), as Mark points out. Don't be visceral: LOOK AT WHAT THEY'RE ACTUALLY DOING. It's your job! This is not 'entertainment'!

BTW, I have plenty of beefs with the dems, believe me - one of which is dem spinelessness about the tax code in the last 25 years; of course you're right that the problems of the middle class are not all the repubs' fault. I usually end up voting for them (or rather against the GOP), but I've never been terribly partisan. But this is the worst government we've had - by pretty far - in my lifetime (I'm 48). I disagree with you and think it's pretty clear to a lot of people that the economy is in much worse shape now than in the Clinton years. And basically, I've had it with the exhausted talking point, 'the dems are ivy-league and condesending'. You don't build National Greatness on resentment. You don't secure the country's future by bankrupting it. And you don't get anywhere by cutting off your nose to spite your face.

(BTW, I'm not addressing you personally, Marc. I know you're more describing the situation rather than advocating, necessarily. I'm just calling a spade a spade: if someone chooses to allow themselves to be hoodwinked, that's their responsibility, not the Democrats'. This insight doesn't solve the Dems' problem, but trying to out-pander the GOP doesn't either. Conning people with bunting, fear, religion and perverse euphemisim is the ultimate condesention).

Posted by: jonnybutter | May 4, 2005 1:32:48 PM

Also BTW, I think you're right, Marc, that people don't feel 'comfortable' with some dems - Kerry was a disaster. It's perfectly legitimate to vote to a certain extent on 'character'. There is going to be a certain amount of 'visceral' feeling no matter what. But a presidential election is not 'American Idol'. Unpleasant personality though he is, I'd take Kerry's actual character - measured by deeds, not words/images - over Bush's any day.

Posted by: jonnybutter | May 4, 2005 1:46:36 PM

Jonny,

I agree with much of what you say. The economy was obviously better overall under Clinton and, to the extent that a rising tide lifts all boats, obviously better for the middle class. But I suspect the prime beneficiaries were people like you and me. I suspect that many working class people would agree with you about the state of the economy but don't think that the Democrats would have made much difference, so why not vote for your social concerns?

As for there being a difference between being a consumer and being a citizen, I agree. But why do you assume that people that are voting their social concerns over their economic interests are not being citizens? I think the problem, frankly, is that liberals don't like the social positions that the middle class votes for and therefore is unwilling to acknowledge their force. Let's take a counterfactual; let's say that, the Democrats were the party against gay rights, abortion, etc. and the GOP was for all of these but that the economic positions were still the same. And let's say, again counterfactually, obviously, that the middle class favored those social positions. Don't you think that a lot of liberals would commend the middle class for voting against their economic self-interest and voting for their moral concerns?

Don't get me wrong--I find the GOP social positions pretty appalling, but they clearly resonates with the middle class. My point is that the Democrats have to take these concerns seriously and not just expect people to vote economically and ignore everything else. I AM NOT saying that Dems should adopt the Republicans positions on these issues. But we have recognize that we will have to make these voters comfortable with the Democratic Party again. If I knew how to do that, I would consulting for the Democrats and making a lot of money.

Posted by: Marc Schneider | May 4, 2005 5:37:25 PM

..why do you assume that people that are voting their social concerns over their economic interests are not being citizens?

Because the government can't actually do all that much about Rove's manifestations of people's anxiety - either can't or won't. And the GOP pols are pretty transparent in simply stoking that anxiety. Unlike a true elitist - like Rove - I don't believe most people are natively stupid - they have to choose to be. I don't think you're doing your job as a citizen if you vote your vague 'social concerns' (usually, in fact, simple resentment and fear) while ignoring what this government is actually doing: bankrupting the country, making it harder for little people to declare Chapter 7, fucking up beyond belief the aftermath of an optional war, etc. etc. etc. Is the government going to eradicate gayness? Teen sex? Crappy television? Please. Even abortion: the GOP is not going to engineer a reversal of Roe v. Wade, most likely. Name me a 'social concern' you have in mind that the Federal government can actually do much to affect. Even gay marriage is, realistically, a state matter (Cheney's position - and now Bush's). 'Voting your social concerns' in the present context is like the proverbial dancing about architecture. Is voting for a republican president going to restore public civility, manners, decency? Not bloody likely (more likely the opposite). Voting is not a public opinon poll in the Gallup sense, wherein almost no one lets the fact that they don't know preclude them from actually answering 'don't know'. What you suggest is exactly backwards: the gov. can do relatively little about 'social concerns' (as you and Rove have defined them) and quite a bit about economic concerns. Voting for 'issues' which political consultants dream up for you is the act of a consumer, not a citizen; it's essentially passive.

But there's more to the story, of course....

I think the problem frankly, is that liberals don't like the social positions that the middle class votes for and therefore is unwilling to acknowledge their force.

I think the problem lies mainly elsewhere, although there is some truth to that...

My point is that the Democrats have to take these concerns seriously and not just expect people to vote economically and ignore everything else.

You got it exactly right, that time: '...and not ignore everything else'. That's right. (And as you said, it would make no sense to do what the national repubs did: exploit social unease...and ignore everything else.)

The dem's problems are passivity and incoherence, not their lack of 'family values'. The dems will continue to lose - and will deserve to - if they just try to carve out their own reaction to the repubs' gambits. Voters will vote, I think, for a real alternative. And they'll vote for someone with the courage of their convictions (eg Kerry was so damaged by the Swift Boat stuff not because of the content itself, but because he wouldn't fight back immediately). The example of Senator Paul Simon here in IL is exemplary. He was a liberal who got enough support from very (VERY) conservative districts to keep winning statewide. Conservatives voted for him not because they agreed with him on everything, but because they respected him.

I like John Edwards. His program is not simply a reaction but an alternative. His focus on responsibility to others (eg his work on poverty) is definitely an alternative to the presiding ethos of the last 25 years (since Reagan). He frames discussions about the tax code in moral terms. He helped write the patient's bill of rights. He talks about payday lenders and rapacious credit card companies. He talks about the ubiquitious-and-bullshit drug company ads. He has personal rectitude and is personally religious. I don't know that it will be him in the end, but he's the kind of dem who can win.

The point is to get on the offensive and put the GOP on the defensive. Tax issues ('economic concerns') are a perfectly good way to do it. Make the Republicans explain why cutting taxes on inherited and passive wealth makes sense, especially during a war - hammer hammer hammer it. Make them explain their 'nuance'! Their nuance is MUCH harder to defend. Act, don't react. (I volunteered for Edwards in the IA caucuses, and 'Act, don't react' was the motto not only of the staff and volunteers, but of Edwards himself; of course it came from him in the first place. That sums it all up, IMO).

Posted by: jonnybutter | May 5, 2005 12:51:42 AM

Jonnybutter,

Agreed. Much of what you say is right on and I acknowledge your very good points about the government not being able to effect social issues. Frankly, you gave me a lot to think about.

I also agree about Edwards; I thought he was much more impressive in the debate with Chaney than Kerry was with Bush, although I seem to be the only one that thinks that (except probably you). I liked the way Edwards set out his themes 1-2-3. It's sort of a lawyer's device (I'm one)but I think it's very effective and really hammered the points in as you say.

I agree with you that the Dems that have run are afraid to say what they stand for. They are afraid, for example, to defend the role of government. They end up blurring the differences between the parties and laying themselves even more open to attack. I thought, for example, that Kerry could have laid out a comprehensive view of foreign policy that could have distinguished himself from Bush's unilateralism--not just on Iraq where he really was pretty compromised--but on the whole range of foreign policy issues, describing his view of America's place in the world. But he never did--instead he just kept picking at Bush for things that were not going to be decisive.

Posted by: Marc Schneider | May 5, 2005 9:33:54 AM

Great comments Marc and jonnybutter -- very engaging and productive. I have to say that I just saw an ad from the UK election in which Labour, after stressing health and education, ended with the slogan "If you value it, vote for it". It is an interesting question as to how much the Dems could learn from Labour's ongoing success. Of course, the thought that an ad like Labour's just wouldn't work here is both plausible and, alas, rather depressing. (Full disclosure: I'm a Brit.)

Posted by: Dan | May 5, 2005 12:33:11 PM

thanks to all for the good discussion

(and yes Marc, I thought Edwards did alright against Cheney. As the pres. nominee, he would've demolished Bush; Cheney was MUCH more difficult).

Posted by: jonnybutter | May 5, 2005 1:52:38 PM

The reinstatement of Skippy & co. to the White Hse, had me going around puzzling about the ole saying, 'It's an ill wind that blows nobody good'. Then I recalled that these thieves will retire on very fat resources but I wondered further about Joe Lunch. who supposedly voted them in. Given there are certain laws that are irrefutable, even by Bush & co. it is a matter of fact that the law of averages continues to operate & that somewhere, somebody who voted for these lice, is being screwed or will be.

Posted by: Allen Thomas | May 29, 2005 8:16:19 PM