CAP’s plan is filled with detailed proposals that loosely fit two broad themes — boosting the skills and earning power of middle-class workers and fostering an economic environment where good-paying jobs are plentiful.
The core of the plan is the notion that economies grow and thrive best when prosperity is broadly shared — a rebuke of the income and wealth inequality that the United States has seen widen over the past few decades and of the tax-cutting, deregulating policies that CAP economists blame for much of that widening.
“We lived the reality of the supply-side economic policies from 2001 on,” said Neera Tanden, the think tank’s president and chief executive. “Our view is, that has been a failure. This is an attempt to realign that.”
Michael Linden, CAP’s managing director for economic policy, said the plan attempts to show “what it would look like if we were having a conversation about growth and about jobs and the middle class” in Washington.
Much of the plan is likely to be a conversation stopper for Republicans.
It includes a proposal to make it easier for workers to form labor unions, against which conservatives have fought hard. It also features a parade of new or increased taxes: on the carbon emissions from power plants, on financial transactions on Wall Street, on dividends and capital gains income, and even on the profits from the “big five oil companies.” CAP officials said they had not calculated the total amount of the tax increases contained in the plan.
CAP’s plan also would require companies that offer executives “golden parachute” payouts when they leave their jobs to pay severance to any other employee who is laid off.
Some of the proposals are pulled straight from President Obama’s agenda, including guaranteeing preschool access for millions more children, overhauling the immigration system and increasingthe minimum wage.
Other components of the plan are newer to Washington’s policy debate and don’t fall as much along ideological lines. They include creating 1 million new apprenticeship programs in American companies and setting up automatic triggers for retaliatory measures against trading partners if they manipulate their currency or otherwise violate free-trade agreements.
The report rolls through plans for housing policy, infrastructure development and guidelines for when the government should intervene in the market to support a nascent industry, such as clean energy or personalized medicine. It calls for creating a Department of Inclusive Capitalism to promote profit-sharing among companies and workers.
It pays particular attention to the quality and accessibility of education, which many economists call the key to improving worker skills and boosting wages for the middle class. CAP proposes several ideas for making college more affordable, including requiring more transparency about the costs to help students choose less expensive options. It also endorses a merit-based pay system for K-12 teachers.
Conservative economists have criticized several of the ideas in the plan, including the minimum-wage increase (which CAP would index to ensure it never fell below half the average wage; at current levels, that would imply a level of nearly $12 an hour). Raising minimum wages now “will make it harder for firms to hire workers because it will make workers more expensive,” economist Michael R. Strain of the conservative American Enterprise Institute wrote earlier this year.