Democrats' Plan Focuses on Middle Class

By Dan Balz
Washington Post Staff Writer
Tuesday, July 25, 2006

DENVER, July 24 -- Sen. Hillary Rodham Clinton (D-N.Y.) accused Republicans under President Bush of economic mismanagement and favoring the rich here on Monday as she outlined a Democratic campaign agenda of tax breaks and incentives designed to make the costs of health care, college and retirement more affordable for millions of Americans.

The former first lady delivered the keynote address at the centrist Democratic Leadership Council's summer meeting, unveiling the results of the "American Dream Initiative," a year-long effort she led on behalf of the DLC to produce a domestic platform that Democrats can take to voters this fall in their bid to win control of the House and Senate.

The agenda represents a renewed effort by Democrats to attract middle-class voters, some of whom shifted to the Republicans in 2002 and 2004 over concerns about national security and terrorism. But the ideas also could form the backbone of Clinton's campaign message in 2008 if she decides to run for president, as many Democrats expect.

"The Republicans say the economy is great for everyone," Clinton said. "They've done nothing about these costs that are eating away at the paychecks of hard-working Americans. Democrats will work to get health-care costs down, to get college tuitions under control, to address the rising costs of gas prices, to cut middle-class taxes and reward companies that create jobs here at home."

Clinton argued that Democrats proved to be good economic stewards and protectors of the middle class during the administration of her husband, Bill Clinton, but said that, over the past six years, the Republican leadership has eroded the economic and income gains that many workers experienced during the 1990s.

"A policy of fiscal discipline and budget surpluses was abandoned for one that racked up debt and claimed that deficits don't matter," Clinton said. "And a policy that focused on helping the middle class get bigger and healthier and stronger was replaced by one that helped the strong get stronger and the rich get richer."

Reworking a line from her husband's 1992 campaign, she said the rallying cry for Democrats this fall should be: "It's the American Dream, stupid."

Republican National Committee spokeswoman Tracey Schmitt contested Clinton's appraisal of the GOP's economic record. "Political theatrics aside, the reality is 5.4 million jobs have been created in the last three years alone," she said in an e-mail message. "Even a master politician can't manipulate those numbers."

Clinton was one of a handful of possible Democratic presidential candidates who spoke during the day. Others included Iowa Gov. Tom Vilsack, the DLC chairman, who said the group should seek to unify the party for the campaign ahead; Sen. Evan Bayh (Ind.), who said Democrats must be credible on national security before voters will listen to them on other issues; and New Mexico Gov. Bill Richardson.

The American Dream Initiative includes proposals that DLC President Bruce Reed said would cost $450 billion to $500 billion over 10 years. He said the cost could be offset by eliminating corporate subsidies in the tax code, cutting out 100,000 unnecessary federal contractors and making a more aggressive effort to identify and collect taxes now going uncollected by the Internal Revenue Service. The initiative also calls for a return to pay-as-you-go budget rules in Washington, which means that all spending on new programs must be offset by cuts elsewhere.

The centerpiece proposal would provide additional support for college costs, with the goal of increasing the number of college graduates by 1 million a year by 2015. The proposal includes $150 billion in block grants for states to ease rising tuition costs and a consolidated tax credit for students. To qualify, states and universities would have to limit tuition increases to the rate of inflation.

Other ideas include requirements for employers to establish retirement accounts for all workers and a refundable tax credit for savers; "baby bonds" that would create a government-funded savings account of $500 for every child born in the United States; a refundable tax credit to help provide the down payment on housing; universal health care for children; and benefits for small businesses to lower the cost of providing health insurance to workers.

The DLC often has put itself at odds with the party's liberal wing, but the new agenda was designed to create a unified message for the Democrats, although congressional leaders also have put forth a party agenda. The DLC document bears the imprint of several other progressive organizations, and DLC founder Al From said he believed that it represented "a set of ideas around which Democrats of all stripes can rally as we head into the fall election."

Initial reviews from other Democrats suggested that Clinton had succeeded. Robert L. Borosage of the liberal Campaign for America's Future, which has often sparred with the DLC, praised the proposals as "pretty interesting, and bolder than normal," adding, "I take it as a pretty good indication of how President Bush unifies the Democrats."

Clinton said Monday that Democrats would hold Bush and Republicans accountable for their national security policies as well as their domestic policies, but Borosage noted that national security remains a fault line between the DLC and liberals, with the DLC out of step with a majority of activists. Clinton was booed and heckled last month at the annual conference of Campaign for America's Future for opposing a timetable for withdrawing U.S. forces from Iraq.

While Clinton was in Denver, her husband was at an event that underscored Democrats' divisions over national security, campaigning in Connecticut for Sen. Joseph I. Lieberman, who faces a stiff primary challenge from antiwar Democrat Ned Lamont.

© 2006 The Washington Post Company